Elizabeth Holmes' trial: the story of a Theranos fraud
The months-long trial was a reckoning for Holmes, for Silicon Valley, and for faking it till you make it.
Former Theranos CEO Elizabeth Holmes' fraud trial in San Jose started in earnest in September of 2021. After four months of testimony from witnesses, the judge sent the case to the jury on Dec. 17. She was found guilty on four charges and not guilty on another four, with the jury deadlocking on three other charges. Over the course of the trial, many reflected on what the Theranos scandal has meant for tech.
Though the trial is over, the Holmes saga isn't. Theranos COO Sunny Balwani's trial is scheduled to start in March, and Holmes' sentencing is currently on tap for September.
- Elizabeth Holmes was found guilty of fraud. The jury found she had defrauded investors, but cleared her on charges of fraud against patients.
- But the jury was deadlocked on 3 of 11 counts. After nearly seven days of deliberation, they couldn't reach consensus on everything.
- It's not clear Silicon Valley has learned any lessons from Theranos. Or if it has, those lessons are already being forgotten.
- Silicon Valley's culture was examined in the trial, but most insiders just want to forget Elizabeth Holmes.
- Meanwhile, Theranos has already changed startup PR forever.
- The stain of such a public scandal is hard to wash away. But former employees don't regret working there for a minute.
- The whole story of Theranos is more complicated than you think. Holmes' relationship with Balwani was among the factors making the jury's job of determining guilt so tough.
Elizabeth Holmes could be sentenced in September
Jan. 12, 2022
Elizabeth Holmes is expected to be sentenced on
Sept. 26, according to the latest court documents. The government will also dismiss the three counts of investor fraud on which the jury was deadlocked.
“The parties agree that a sentencing hearing following Labor Day 2022 would be appropriate in light of ongoing proceedings in a related matter,” the court documents read, referring to fraud charges against former Theranos president and Holmes’s ex-boyfriend Sunny Balwani. Balwani’s trial was pushed to March because of COVID-19 concerns.
Sunny Balwani's trial is delayedPhoto: Michael Short/Bloomberg via Getty Images
Jan. 7, 2022
The fraud trial of Ramesh "Sunny" Balwani, former president and COO of failed blood-testing startup Theranos, has been delayed. The trial is now expected to take place in March.
Balwani's trial, which was set to take place on Feb. 15, was put off due to COVID-19 concerns. This is the second delay to Balwani's trial, the first of which was due to the unexpected length of Elizabeth Holmes' trial.
Elizabeth Holmes was found guilty
Jan. 3, 2022
After more than four months in court, a jury of eight men and four women found Elizabeth Holmes guilty on four counts for defrauding investors, but not guilty on four counts related to defrauding patients.
The founder and former CEO of Theranos was found guilty on three counts of investor fraud and one count of conspiracy to defraud investors. However, the jury acquitted Holmes when it came to four counts related to defrauding two patients or conspiring to commit fraud against patients.
The jury was deadlocked on 3 of 11 countsPhoto: Justin Sullivan/Getty Images
Jan. 3, 2022
Shortly after starting its seventh full day of deliberations, the jury in Elizabeth Holmes' fraud trial informed the court that it cannot reach an unanimous verdict on three of the 11 counts. It is not known which of the 11 charges of fraud and conspiracy to commit fraud against patients and investors that the jury is deadlocked on.
After additional deliberation for a few hours, the jury informed the court Monday afternoon that it was still deadlocked and could not reach an unanimous verdict on the three counts.
Guilty or not, the verdict won’t change Silicon Valley
Dec. 20, 2021
Elizabeth Holmes has long been convicted in the court of public opinion. But after four long months, a jury of her peers will decide whether the Theranos founder is criminally guilty of defrauding investors and patients.
For Holmes, the verdict will have obvious personal consequences, including the threat of up to 20 years of prison. But for the rest of tech, experts outside the Silicon Valley bubble say it’s unlikely there will be some dramatic revelation or change in behavior, regardless of the outcome.
How Theranos changed startup PR forever
Dec. 15, 2021
Theranos CEO Elizabeth Holmes used to attract the kind of press founders dream of. She had a glowing profile in the New Yorker and landed on the cover of Fortune and Forbes.
But now those same articles have been entered into evidence in her criminal fraud case, where she faces 11 charges for fraud and conspiracy to commit fraud. The statements Holmes made to hype her blood-testing startup are now what the government is using to prove she committed crimes.
What Elizabeth Holmes regretsPhoto: Ethan Swope/Getty Images
Nov. 23, 2021
Elizabeth Holmes intentionally hid the use of third-party testing devices from Walgreens, its biggest partner, in order to protect "trade secrets," the former Theranos CEO testified in her third day on the stand for her ongoing fraud trial in San Jose.
She said that Theranos made modifications to use its tech with a blood testing device from Siemens, which could run a hundred patient samples and perform "dozens" of tests, claiming it was an "open source" device that could work with Theranos' "own proprietary chemistry."
Theranos by the numbers: Do forecasts show fraud or failure?
Sept. 14, 2021
Theranos inflated its revenue projections when, behind the scenes, insiders knew the startup had widening losses and dwindling revenue, prosecutors argued on the second day of the Elizabeth Holmes trial.
The testimony was the first glance under the hood of Theranos, a blood-testing company which once promised to revolutionize the detection of disease. Holmes, its former CEO, is standing trial for wire fraud and conspiracy to commit wire fraud in San Jose.
One of the prosecution's key arguments is that Theranos wildly inflated its revenue projections to attract investors.
Silicon Valley wants to forget Elizabeth Holmes
Sept. 7, 2021
It's not just Holmes on trial for the alleged fraud that vaporized a lab-testing company once worth nearly $10 billion. Silicon Valley's culture will be examined for its habit of enthusiastically embracing visionaries and supporting those who took a "fake it till you make it" approach that has let a lot of companies grow.
Startups in Silicon Valley launch with MVPs — not most valuable players, but minimum viable products — and build from there. Selling moonshots and visions of massive societal change define Silicon Valley more than its porous and shifting borders in the Bay Area.
For former employees, the stain of Theranos is hard to wash away
Theranos headquarters. | Photo: Andrej Sokolow via Getty Images
Aug. 31, 2021
The first time Charlie realized that his time at Theranos might become a scarlet letter on his resume was in May of 2016.
It was a full seven months after reporter John Carreyrou published his first explosive exposé on the company, accusing Theranos' leaders of covering up serious accuracy issues with its widely hyped blood-test machines. Until that point, Charlie, a pseudonym for a former Theranos employee who agreed to speak with Protocol on the condition of anonymity, says he was "sipping the Kool-Aid," believing the company's CEO Elizabeth Holmes and COO Sunny Balwani when they said the Journal's accusations were bogus.
In the spring of 2016, though, Charlie saw for himself for the first time how the company's top brass was exaggerating its device's capabilities to outsiders — just like Carreyrou said they were. Charlie had just begun interviewing with other companies when the CEO of the very first startup he applied to stopped him short. "I was told by the CEO that their investors advised him not to hire anybody from Theranos, given what was going on in the media," Charlie said. "That was a wake-up call for me."
Forget what you know about Theranos
Dec. 16, 2021
Everyone thinks they know the story of Theranos. They’ve read the book, seen the documentaries, listened to the podcasts. It’s so high-profile that Apple bought the rights to a movie starring Jennifer Lawrence as Elizabeth Holmes. But, as her defense attorney Lance Wade previewed in his opening statement, “The reality of what happened at Theranos is far, far more complicated than what you’ve heard so far.”