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Elizabeth Holmes returns to defend herself at Theranos trial

Disgraced Theranos founder Elizabeth Holmes will return to the helm next week to give further testimony on her now defunct blood testing start-up, which was once valued at $ 9 billion.

Lawyers for the 37-year-old entrepreneur had previously declined to say whether they would call her as a witness to defend against charges that she tricked investors into funding her doomed biotech company.

But for an hour before court closes on Friday, she removed her mask and testified in San Jose, Calif., After the prosecution closed her case.

Ms Holmes has pleaded not guilty to 11 counts of wire fraud, with each count carrying a sentence of up to 20 years in prison.

She began by recounting to the crowded courtroom how she left Stanford University in 2003 to found Theranos using her savings, with the business plan of “developing a library of tests and trying to help pharmaceutical companies get drugs to market faster. “

“I was doing it on my own,” she said. “I started working all the time … trying to meet people who could help me build this.”

Because Ms Holmes has decided to testify for the defense, it will also allow federal prosecutors to cross-examine her. The trial is only heard three days a week, which means cross-examination will likely not begin until after Thanksgiving.

Defendants are not required to testify in their own defense in U.S. criminal trials, and defense attorneys may avoid going this route if they believe their client may alienate a jury.

Big fraud trial in a very small world

The lawsuit is closely watched as a de facto referendum on Silicon Valley and its culture of distorting the truth to create hype and secure funding for prototype products.

Mrs. Holmes herself has become a cult figure. Some had laughed at her attempts to make herself look like Steve Jobs in a black turtleneck uniform, while others describe her as an example of a sexist double standard and even praise her, often in a semi-ironic way, like a feminist icon.

“Failure is not a crime”, say defense lawyers

Theranos raised more than $ 940million (£ 699million) from investors prior to its disbandment in 2018. These investors included powerful figures like media mogul Rupert Murdoch, Oracle founder Larry Ellison and family by former Trump administration education secretary Betsy DeVos.

The startup reached a valuation of $ 9 billion thanks to Ms. Holmes’ claim that she invented a revolutionary compact testing machine capable of obtaining results from a tiny bite of blood.

Yet those promises began to unravel in 2015 when The Wall Street Journal exposed issues with the technology, starting a dramatic implosion that spawned a book, documentary, podcast series, and upcoming TV series.

Prosecutors are now accusing Ms Holmes of knowingly misleading investors and customers about the capabilities of her “Edison” device, a PC-sized box that could supposedly perform cheap blood tests at drugstores or the typical needle-less supermarkets.

“Due to lack of time and money, Elizabeth Holmes decided to lie,” said senior prosecutor Robert Leach.

Mrs Holmes insists she hasn’t done anything wrong. Her lawyers say she “naively underestimated” the challenges for her business, portraying a motivated young woman who fights for her vision in a culture that encourages founders to be bold.

“In the end, Theranos failed and Ms. Holmes walked away with nothing,” her lawyer Lance Wade said in his opening remarks. “But failure is not a crime. Doing your best and failing is not a crime.”

Witnesses included patients, whistleblowers and General James ‘Mad Dog’ Mattis

Over an 11-week period, the prosecution called 29 witnesses to testify against it, including company insiders, whistleblowers and the former board member and defense secretary of the Trump administration, General James “Mad Dog” Mattis.

“It became a point where I didn’t know what to believe about Theranos,” said General Mattis, who had invested $ 85,000 of his savings in the business, and told Ms. Holmes: “I believe in what you do.”

Prosecutors extensively used video footage of Ms Holmes from an interview with Forbes reporter Roger Parloff for cover that Theranos then used as part of his pitch to investors.

In a clip, Ms Holmes claimed her so-called “Edison devices” could perform “over 1,000 tests,” compared to 600 then available from established testing company Quest Diagnostics.

However, during the trial, former Theranos lab associate Erika Cheung, who ultimately helped bring down her employer, told the court that Edison could only perform 12 different tests and run one at a time for each patient.

Merhl Ellsworth, a patient, and her doctor Mark Burnes testified that Theranos gave them a wide variety of prostate cancer screenings, two showing very high results and two showing very low. Months later, Dr Burnes said, Theranos sent him a letter canceling the higher ones.

Prosecutors also showed the jury a due diligence report commissioned by Theranos featuring the logos of pharmaceutical companies such as Pfizer and Schering-Plow.

A Pfizer scientist said he never approved the use of his logo, and a Walgreens executive who oversaw a $ 140 million investment in Theranos said he believed the logos were real.

On cross-examination, Ms Holmes’ attorneys sought to show that witnesses failed to exercise due diligence on Theranos, with some investing despite the lack of audited financial statements or consultation of external experts.

“This is the biggest sales meeting of his life”

Until Friday, Ms Holmes had simply remained unmoved in court.

Legal experts described Ms Holmes’ testimony as a risky decision, but said it could give her a chance to show off the magnetic charisma that many prosecution witnesses have said she exerts on those she deals with.

“His whole life has been in sales,” Michael Weinstein, a white-collar criminal defense lawyer with Cole Schotz, told The Wall Street Journal. “It would be the biggest sales meeting of his life.”

Ms Holmes’ team could also ask her about her romantic relationship with Theranos executive Ramesh “Sunny” Balwani.

In previous court documents, she said he abused her emotionally and physically, controlling how she slept, how she dressed and what she ate, and the defense team said on Friday that he trusting was one of Mrs Holmes’ biggest mistakes.

A lawyer for Mr. Balwani said in a filing that he “unequivocally denies any abuse at any time.” He has yet to testify in Ms Holmes’ case and will face similar charges next year.

Before her fall, many had hailed Ms Holmes as a rare example of the power of women in Silicon Valley, whose largest companies are male-dominated and have often been accused of sexism.

Ellen Pao, a tech investor and former chief executive of Reddit, argued that male CEOs and founders “just aren’t held accountable” in the same way Ms Holmes is, calling on prosecutors to prosecute them as well.

“Questionable, unethical and even dangerous behavior has spread in the male-dominated world of tech start-ups,” she wrote. “

Ms. Holmes also drew an audience among the young women on TikTok, who call themselves “Holmies” with varying degrees of irony. A videographer congratulates her for “making billions for a complete lie.”

“The idea of ​​a woman claiming to have a very masculine quality in order to gain trust and attract investors is very much a reflection of female entrepreneurship,” influencer Serena Shahidi told Elle magazine. A Holmes-themed shop on Etsy has sold over 1,200 masks, T-shirts, and mugs.


The Independent Gt

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