Elizabeth and Noel Holmes
Photo: Justin Sullivan/Getty Images

Here comes the defense of Elizabeth Holmes

Source Code

Good morning! This Friday, what's next in the Theranos trial, Apple's reportedly making chips for its not-so-secret electric vehicles, and ConstitutionDAO's wild week.

The prosecution will soon rest

There have been articles, books, podcasts and documentaries on the Theranos saga, built around whistleblower reports and former employees. But Elizabeth Holmes' side of the story will come out soon.

The U.S. government plans to soon rest its prosecution of Holmes, who's facing charges of fraud and conspiracy to commit fraud for misleading investors and patients as Theranos CEO. Its case so far has been to paint Theranos as a company with unreliable tests that concealed the use of third-party machines in its labs and ultimately didn't care about patients and lost the trust of investors who had no idea what to believe.

But in the prosecution, we've been able to see the beginnings of Elizabeth Holmes' defense as her lawyers have pushed back in hours and hours of cross-examination. Here are some of the big themes of her defense so far:

  • Holmes didn't know better. While Silicon Valley often worships the college dropout founding story, Holmes' lawyers are trying to use her lack of education to bolster her defense and show that she relied on the scientists with Ph.D.s to tell her what to do. Her attorneys have spent long periods with witnesses going through the Theranos org chart, asking about the education levels of all the employees, and had witnesses testify that Holmes did not have the education level to run a lab.
  • Investors are supposed to be the sophisticated ones. One thing is clear: Investors missed a lot of red flags in their due diligence processes, and went ahead and invested anyway. Holmes' lawyers have enjoyed pulling up the fine print of investor docs and reading some of the legal boilerplate about how investors knew this was a risky decision. The prosecution, though, has hammered that investors never got the full picture, and even if it was lying by omission, Holmes never told some investors that Theranos used third-party devices.
  • Holmes was Theranos' biggest believer. Holmes never sold a single share of her Theranos stock. "If Ms. Holmes was trying to defraud these sophisticated investors, don't you think she might sell some of her stock to take advantage of them and try to cash in?" her attorney Lance Wade asked in his opening statement. The prosecution has to prove that Holmes had an intent to deceive to convince the jury of fraud, but the defense is trying to re-cast it that she didn't knowingly defraud investors. She simply believed it would work and worked hard to try to make that come true before Theranos ultimately failed.
  • The Big Bad Balwani defense: A big strategy has been to deflect blame from Holmes to Sunny Balwani, Theranos' former president and COO who has his own separate trial beginning in January. Because the lab technically fell under Balwani's purview, often issues that were flagged by employees like Erika Cheung were raised to Balwani first. He also was involved with investor due diligence and was the one to deflect investors from talking to partners like Walgreens. That being said, Holmes has been linked directly to a lot of lies and exaggerations (like mentioning that the Theranos device was being used on the battlefield). And as CEO, the jury may decide she was ultimately culpable for what was happening.

But what role did Balwani and Holmes' personal relationship have in this is one wild card we haven't heard yet. Her attorneys had previously outlined in court documents allegations that Balwani abused and controlled Holmes, which they plan to talk about during trial. "There was a side of that relationship that many people saw and may talk about it during this case, but like many relationships, there was a side they never saw," Wade said during the opening statements.

Soon it will be the defense's turn to tell its side of the story, but there's one last question looming over the trial: Will Holmes take the stand in her own defense? We'll find out soon enough.

— Biz Carson (email | twitter)

Read more of our Theranos trial coverage here.


Rochelle is one of many experts working on privacy at Facebook—to give you more control over your information.

Hear from Rochelle on why Facebook supports updating regulations on the internet's most pressing challenges, including federal privacy legislation.

Learn more

People are talking

Hundreds of Activision Blizzard workers are urging Bobby Kotick to leave:

  • "The information that has come to light about his behaviors and practices in the running of our companies runs counter to the culture and integrity we require of our leadership."

And Xbox's Phil Spencer said he's rethinking the company's ties to Activision Blizzard in light of allegations against Kotick:

  • "This type of behavior has no place in our industry."

Billionaire John Malone said he tried to buy Netflix when the stock was dirt cheap:

  • "… but he wouldn't sell it to me. You know, damn that bad luck."

Portfolio managers aren't as hot as they used to be, Schroders' Peter Harrison said:

  • "They'll never thank me for saying it, but their value has declined relatively because there are so many other parts that need addressing."

Making moves

AlixPartners is looking into Macy's ecommerce business. The retailer hired the consulting firm after an investor said Macy's should do more in online sales.

China has a new bureau for overseeing antimonopoly work. It's divided into three units: one for policymaking, one for rules enforcement and one for M&A reviews.

Apple's self-driving EV is reportedly aiming for a 2025 launch. The company designed its own chip for the vehicle, sources told Mark Gurman at Bloomberg.

Amazon's "Just Walk Out" concept is hitting Starbucks. Starbucks opened a new store in New York that lets customers pick up items and walk out without having to see a cashier.

Paul Stamatiou left Twitter. Stamatiou was a designer at the company for nearly a decade.

Anja Hamilton is Nutanix's new chief people officer. She was most recently the EVP and chief HR officer of Poly and has held roles at eBay and Electronic Arts.

In other news

Amazon's employee security system is a "free for all," according to a Wired report. The company has let workers take advantage of customer data, allowing them to look at purchases and take bribes from sellers in exchange for helping their businesses.

A group of state attorneys general want to look into Meta. The coalition is launching a probe into the company to figure out whether Meta pushed kids to use Instagram despite knowing it negatively affects them.

ConstitutionDAO didn't win the auction for a copy of the U.S. Constitution. The group raised more than $40 million, but it wasn't enough in the end. No sign yet of the actual winner, by the way.

Apple, along with Live Nation and rapper Travis Scott, are being sued. Hundreds of people who said they were injured during the deadly Astroworld concert at the beginning of the month filed the lawsuit for $2 billion.

Fridays are for the office, for Bay Area workers at least. A new report found that Fridays are Bay Area tech employees' most popular time to be in the office, while it was slower for workers in Boston, Chicago and New York.

A win for Robinhood. A judge dismissed a lawsuit accusing Robinhood of trying to stop investors from buying meme stocks like GameStop's earlier this year, saying the claims lacked evidence.

You won't find the meaning of life in an office, Americans said in a new Pew research study. The number of people who find purpose in their jobs has fallen off in recent months, showing how much priorities have changed since before the pandemic.

Facebook is giving people more control over their News Feed. The company is testing the ability for users to tweak their preferences and the amount of content they see.

What are the words to that song?

On your weekend road trip, you no longer have an excuse to get the song lyrics wrong. Spotify now lets you find the words to all of your favorite songs right on the app.

All you need to do is tap "Now Playing View" on the song, swipe up, and lyrics will pop up as the song plays out. Spotify said lyrics were one of its most-requested features, and for good reason: For way too long, we were all singing "all the lonely Starbucks lovers" instead of "got a long list of ex-lovers." Happy listening!


Rochelle is one of many experts working on privacy at Facebook—to give you more control over your information.

Hear from Rochelle on why Facebook supports updating regulations on the internet's most pressing challenges, including federal privacy legislation.

Learn more

Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you Sunday.

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