Nov. 23, 2021, 7:45 p.m. ET
Nov. 23, 2021, 7:45 p.m. ET


The third day of Elizabeth Holmes’s testimony was a grueling, rapid-fire rebuttal of points that prosecutors had taken 11 weeks to make and advanced important themes for the defense.
Among those themes: Theranos’s failure was the result of people both inside and outside the company, rather than being solely Ms. Holmes’s fault. Ms. Holmes’s lawyers also sought to portray her as a dedicated entrepreneur whose efforts to protect her company were unfairly skewered by the prosecution as fraud.
Here were some of the key moments of Tuesday’s testimony:
Validation reports
One of Tuesday’s bombshell moments involved Theranos’s pharmaceutical validation reports, which bore the logos of the drug makers Pfizer and Schering-Plough, even though neither had a hand in preparing or approving the reports.
Prosecutors had repeatedly highlighted the reports as key instances of Ms. Holmes’s deception, since investors and partners had testified that the documents helped persuade them to invest in Theranos or work with the company. But none of them established Ms. Holmes’s personal involvement.
On Tuesday, Ms. Holmes said she had added the logos of the pharmaceutical companies to the reports herself. But she said that she had not meant to deceive anyone.
Instead, she said she had added the drug makers’ logos “because this work was done in partnership with those companies and I was trying to convey that.” She added that she wished she had “done it differently” after hearing from witnesses that they had felt misled and viewed the logos as endorsements of Theranos by the drug companies.
Shifting the blame
Throughout Tuesday’s testimony, Ms. Holmes blamed others for Theranos’s problems.
For one, she said that Theranos’s commercial partnerships with Walgreens and Safeway unraveled because of changing priorities from Walgreens and Safeway rather than issues on the part of her start-up. Her comments flew directly against what executives from Walgreens and Safeway had testified.
Ms. Holmes also said that her employees gave her positive reports on the performance of Theranos’s technology, which she had trusted to be accurate. And she highlighted the experience of her board of directors, implying that she respected their judgment and that they had led her astray.
Yet Ms. Holmes’s testimony was also a study of contrasts. Even as her lawyers argued that their client had relied on other people to tell her how her company’s technology worked, she confidently described Theranos’s products to the jurors on Tuesday.
Caring too much
Ms. Holmes’s lawyer sought to portray her on Tuesday as a founder who cared deeply about protecting Theranos’s brand and financial future, to the point that she made decisions that were later depicted as fraudulent.
In one instance, Ms. Holmes said she had concealed Theranos’s use of third-party devices for its blood tests — rather than using her start-up’s own technology — from Walgreens. That has been a key point hammered by prosecutors to show Ms. Holmes was aware that Theranos’s technology didn’t work.
But Ms. Holmes reframed the incident. She said she had hidden Theranos’s use of third-party devices for its blood test so that modifications her company had made to those devices would remain confidential. She said she viewed the changes made to the machines as trade secrets. And keeping those secrets was crucial to Theranos’s financial future to prevent rivals with more resources from copying them, she said.
Ms. Holmes also said that some of Theranos’s marketing, which declared the company needed only a single drop of a patient’s blood to discern whether the person had various ailments, was not meant to hoodwink. Instead, the marketing was intended to build Theranos’s brand independently of partners such as Walgreens, she said.

Nov. 23, 2021, 7:00 p.m. ET
Nov. 23, 2021, 7:00 p.m. ET Erin Griffith
San Jose, Calif.


The testimony has wrapped up for today, with plans to continue on Monday after the Thanksgiving holiday. The judge offered an extra admonition to the jury to not talk about the case with anyone. 
“We’re going to have Thanksgiving and I know that means strong fellowship with families, and friends” he said. “Do your best to pass the mashed potatoes and not engage in conversation with anyone.”

Nov. 23, 2021, 6:48 p.m. ET
Nov. 23, 2021, 6:48 p.m. ET Erin Griffith
San Jose, Calif.


Ms. Holmes said that Theranos pursued relationships with several arms of the military after 2010. She didn’t discuss whether any of those came to fruition but her lawyer quickly switched to a discussion about a study that Theranos did with the American Burn Association, which was conducted inside the United States Army Institute of Surgical Research.
Earlier in testimony, Danise Yam, Theranos’s former head of finance, had said that Theranos had no contracts with the military but did have one with the American Burn Association.

Nov. 23, 2021, 6:32 p.m. ET
Nov. 23, 2021, 6:32 p.m. ET


Sunny Balwani leaving federal court in San Jose, Calif., in 2019.Credit...Stephen Lam/Reuters


Who is Sunny Balwani, Elizabeth Holmes’s former right hand at Theranos and her former boyfriend, and where has he been throughout her fraud trial? On Tuesday, Ms. Holmes brought up Mr. Balwani several times in testimony.
Mr. Balwani’s lawyer, Jeffrey Coopersmith, was in the courtroom last week, taking notes in a large yellow notebook, reading legal documents on his phone and declining to comment on his client. But of Mr. Balwani, there has not been a trace.
Nor did he seem to be at home on a recent Sunday morning in Atherton, Calif., the Silicon Valley community that the richest of the techno-rich call home. No one answered the gate buzzer outside his 8,800-square-foot house, which he bought in 2018. There were no cars to be seen and no lights on. Zillow values the property at $19 million.
The mystery of Mr. Balwani’s whereabouts was in keeping with what is known about him, which is very little, including why he is called “Sunny.” His given name is Ramesh, which was what he was called in a handful of stories and news releases in 1999, when he was a dot-com guy. It was also on his divorce papers from a Japanese artist in 2002. By the time he was co-authoring patents at Theranos a decade later, he was simply Sunny.
Mr. Balwani’s early career was in software. He was a Northern California sales manager for Microsoft, selling the company’s products to executives at other firms. On Oct. 4, 1999, when the dot-com boom was roaring, he joined a start-up called CommerceBid.com as president.
CommerceBid built platforms that enabled businesses to pit suppliers against each other to drive down costs. That idea seemed to have unlimited potential, and CommerceBid did not even make it to its first birthday before it was bought by another company in the space, called Commerce One, for $225 million. A few weeks later, Commerce One, whose shares were publicly traded, was worth $20 billion.
Then the collapse came. A recession forced businesses to cut spending, and executives wondered if maybe the technology did not work well in any case. By 2004, Commerce One was worth nothing. It was a routine dot-com rags-to-riches-to-rags story, hardly even remembered among the bigger flameouts of the era.
Failure in Silicon Valley has been considered a virtue because it teaches valuable lessons. But it often can be rewarding in its own right. Mr. Balwani made it out with a reported $40 million.
He later became the chief operating officer at Theranos and had a romantic relationship with Ms. Holmes, which has been detailed in emails submitted to the court. Mr. Balwani also faces fraud charges, and his case is scheduled to go trial next year. Like Ms. Holmes, he has pleaded not guilty.

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Nov. 23, 2021, 6:30 p.m. ET
Nov. 23, 2021, 6:30 p.m. ET

Ms. Holmes said that Mr. Balwani was responsible for making Theranos’s financial projections.

Nov. 23, 2021, 6:29 p.m. ET
Nov. 23, 2021, 6:29 p.m. ET Erin Griffith
San Jose, Calif.


Theranos’s partnership with Safeway fell apart. In Mr. Burd’s testimony, jurors saw a number of emails from Mr. Burd where he expressed frustration over delays and troubles with the opening of Theranos’s wellness centers in its stores.
Ms. Holmes testified that Mr. Burd had other reasons for the time pressure. She said he wanted to launch before he retired. And she said he told her it would help Safeway’s stock price.
When asked about this in his testimony, Mr. Burd, who was chief executive of Safeway for two decades, said, “You have your ups and downs over the course of 20 years.”

Nov. 23, 2021, 6:29 p.m. ET
Nov. 23, 2021, 6:29 p.m. ET

For the second time today, Ms. Holmes implied that a change in leadership at a commercial partner contributed to a change in the partner’s relationship with Theranos. Ms. Holmes said that there were disputes between Theranos and Safeway after Mr. Burd announced his retirement and a private equity firm took over.
This shifts the blame onto investors and works to discredit earlier executives who testified, implying that there was more that happened after their time at the company that they could not speak to.

Nov. 23, 2021, 6:23 p.m. ET
Nov. 23, 2021, 6:23 p.m. ET

Ms. Holmes said that she thought that Steven Burd, Safeway's chief executive, understood that Theranos was using conventional machines in 2012.

Nov. 23, 2021, 6:17 p.m. ET
Nov. 23, 2021, 6:17 p.m. ET

Mr. Downey brought up an email that mentions Theranos’s dinosaur lab. Theranos called its lab with conventional machines “Jurassic Park” because Mr. Balwani believed those machines were dinosaurs, according to earlier testimony. Theranos’s lab with its new machines was called “Normandy.”

Nov. 23, 2021, 6:05 p.m. ET
Nov. 23, 2021, 6:05 p.m. ET

Mr. Downey showed the jury the 2010 agreement between Theranos and Safeway. He emphasized that some of the requirements were difficult for Theranos to implement, and that the company would have to give back some of the money Safeway paid it if the grocery chain terminated the agreement.

Nov. 23, 2021, 6:02 p.m. ET
Nov. 23, 2021, 6:02 p.m. ET

Based on the court schedule, we should expect one more hour of testimony from Ms. Holmes today before the court goes on recess for Thanksgiving break. Today has already been a blockbuster day of testimony in which Mr. Downey guided Ms. Holmes through attempts to rebut many of the prosecution’s main points.

Nov. 23, 2021, 6:01 p.m. ET
Nov. 23, 2021, 6:01 p.m. ET

Ms. Holmes mentioned Mr. Balwani again, noting that was responsible for sending Theranos’s financial information to Safeway. Ms. Holmes has mentioned Mr. Balwani a few times today, but she has not focused on him or indicated that he had any special significance in his role compared to other senior executives. Experts anticipated that Ms. Holmes’s relationship with Mr. Balwani would be a large part of her testimony, but that hasn’t happened so far.

Nov. 23, 2021, 5:57 p.m. ET
Nov. 23, 2021, 5:57 p.m. ET

Ms. Holmes talked about how Theranos never launched service centers at Safeway, citing lab and regulatory issues that led to the termination of the relationship in 2016. (She did not mention The Wall Street Journal’s investigation into the company in 2015.)

Nov. 23, 2021, 5:52 p.m. ET
Nov. 23, 2021, 5:52 p.m. ET

One major theme from today paints Ms. Holmes as an entrepreneur who cared deeply about protecting her company’s brand and financial future, to the point that she made decisions that were later skewered by the prosecution as fraudulent. She concealed that Theranos was using third-party devices — but said this was to protect trade secrets, not hide that Theranos’s own technology was not doing all of the tests. Now, she said that some of Theranos’s most extreme marketing was to crystallize its independent brand so that it would not be subsumed by Walgreens.

Nov. 23, 2021, 5:51 p.m. ET
Nov. 23, 2021, 5:51 p.m. ET

Ms. Holmes got to the point of discussing the Chiat Day presentation: the language around “a single drop of blood” was a symbol of the product they were trying to build. Prosecutors have pointed out that this marketing was inaccurate.

Nov. 23, 2021, 5:47 p.m. ET
Nov. 23, 2021, 5:47 p.m. ET

Mr. Downey said he forgot to enter a document back into evidence, so he has returned to a presentation that Chiat Day, a marketing firm, made to Ms. Holmes and Theranos. It includes terms like Brand Belief — “a north star for the brand” — and Brand Behavior, “which defines the way in which a brand behaves to honor this belief.”

Nov. 23, 2021, 5:38 p.m. ET
Nov. 23, 2021, 5:38 p.m. ET

Ms. Holmes said that she was surprised that Alan Eisenman, one of Theranos's investors, decided to invest again in Theranos in 2013 because both sides had “a lot of frustration.” Mr. Eisenman had said on the stand earlier in the trial that Ms. Holmes cut him off and threatened him when he asked for more information about the company.

Nov. 23, 2021, 5:37 p.m. ET
Nov. 23, 2021, 5:37 p.m. ET

Ms. Holmes said that a slide deck given to Theranos's investors to persuade them to invest was created by the company's engineers and scientists. The prosecution had pointed out some misleading claims about Theranos’s technology in that deck.

Nov. 23, 2021, 5:34 p.m. ET
Nov. 23, 2021, 5:34 p.m. ET


A Theranos Wellness Center inside a Walgreens Pharmacy in Phoenix, Ariz., in 2016.Credit...Steve Craft for The New York Times


Elizabeth Holmes, the founder of the blood testing start-up Theranos, tried recasting the dissolution of her start-up’s partnership with Walgreens on Tuesday. The goal appeared to be to shift the blame onto Walgreens’s executives and away from issues with her company’s technology.
Theranos and Walgreens had collaborated to place Theranos’s blood tests in Walgreens stores starting in 2013. At the time, Ms. Holmes and Theranos hailed the cooperation as a sign of her start-up’s success, which then led to more interest in her company from investors and others. The partnership then unraveled when Theranos’s technology was shown not to work.
Earlier in Ms. Holmes’s fraud trial, former Walgreens executives said they had not introduced Theranos’s technology in stores nationally because of problems with the start-up’s technology. Instead, Walgreens confined the Theranos tests to some of its stores in Arizona and California. Their testimony showed the fallout from Theranos’s technology issues on partners and on patients.
On Tuesday, Ms. Holmes said she was aware of some snafus with the Walgreens rollout in the first half of 2014 but thought that it was going well.
She said that Theranos’s partnership with Walgreens changed when Walgreens acquired a pharmacy company, Boots. That caused a leadership transition at Walgreens that included the departure of Wade Miquelon, the company’s former chief financial officer. (Mr. Miquelon testified at the trial for the prosecution.) Walgreens then decided to slow the expansion under the new management, she said.
The implication was that it was not Theranos’s fault that the national rollout did not occur, but rather was the result of a shift in priorities for Walgreens. Throughout her testimony on Tuesday, Ms. Holmes has argued that she was not the one to blame. She said she truly believed Theranos’s technology worked because that was what she had been told by her company’s scientists and other employees. She also said the directors on Theranos’s board were experienced, implying that they should have given her better counsel.
Ms. Holmes also addressed inaccuracies in Theranos’s test results. Prosecutors had focused on testimony from patients who had complained about false results from Theranos’s blood tests that they took at Walgreens.
Ms. Holmes said she did not receive complaints about inaccuracies in her weekly updates about the Walgreens rollout.

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Nov. 23, 2021, 5:31 p.m. ET
Nov. 23, 2021, 5:31 p.m. ET


Sam Nunn, second from left, Henry Kissinger and George Shultz, who were all prominent members of Theranos’s board. They were at an event in Berlin in 2010 with German’s foreign minister then, Guido Westerwelle, left.Credit...Rainer Jensen/EPA


Elizabeth Holmes, testifying in her defense in federal court on Tuesday, described the members of Theranos’s board of directors as capable people with invaluable advice for an executive.
They were certainly prominent Americans, drawn from decades of service in senior levels of government and some of the most powerful companies in the country. And they were well compensated for their time: Each was paid a $150,000 salary and given half a million shares. Some also received consulting salaries.
One of those board members, former Defense Secretary Jim Mattis, has said he was surprised that the board had little medical expertise related to the type of tests that Theranos, the failed blood testing start-up, said it offered.
Here are the well-known members of the Theranos board that Ms. Holmes was referring to during her testimony on Tuesday:
George Shultz, an economist, former secretary of state and member of several Republican administrations.
William Perry, a former defense secretary.
Henry Kissinger, the longtime diplomat, former secretary of state and former national security adviser.
Sam Nunn, a former Democratic senator from Georgia.
Bill Frist, a physician and former Republican senator from Tennessee.
Gary Roughead, a retired Navy admiral and former chief of naval operations for the Navy.
Mr. Mattis, the former defense secretary and Marine Corps general.
Richard Kovacevich, the former chief executive of Wells Fargo.
Riley Bechtel, a billionaire and the former chairman of the Bechtel Corporation.
William Foege, the former director of the Centers for Disease Control and Prevention.
Ms. Holmes herself, and Theranos’s chief operating officer, Ramesh “Sunny” Balwani, who were dating at the time.

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Nov. 23, 2021, 5:25 p.m. ET
Nov. 23, 2021, 5:25 p.m. ET

Ms. Holmes continued her testimony about Mr. Lucas after the break. She testified that he asked no questions about Theranos’s technology or about its business plan. A lack of due diligence by Theranos investors has been a major theme of the trial.

Nov. 23, 2021, 5:18 p.m. ET
Nov. 23, 2021, 5:18 p.m. ET

Before the break, Ms. Holmes addressed her refusal to identify Theranos’s strategic partners to investor Christopher Lucas, a point that came up in his testimony. She said Theranos had confidentiality agreements with those companies and had been asked not to disclose them.

Nov. 23, 2021, 5:15 p.m. ET
Nov. 23, 2021, 5:15 p.m. ET

Court is back in session.

Nov. 23, 2021, 4:36 p.m. ET
Nov. 23, 2021, 4:36 p.m. ET

The court is taking its afternoon break. Back in a bit.

Nov. 23, 2021, 4:17 p.m. ET
Nov. 23, 2021, 4:17 p.m. ET

Ms. Holmes said that she shared Theranos’s trade secrets with the board, including that they could run a small sample on a traditional machine. She said the board talked about whether to file for public patents and discussed the decision to preserve it as a trade secret.
Senator Nunn, who had been on the board of Coca-Cola, talked about the methods the company used to protect the Coke formula, Ms. Holmes said.
The implication is that Theranos’s directors profited handsomely from their work on the board, and that Ms. Holmes, once again, was relying on the experienced people she surrounded herself with. It also supports the larger theme that Ms. Holmes was just trying to protect her company, not trying to conceal Theranos’s technology.

Nov. 23, 2021, 4:12 p.m. ET
Nov. 23, 2021, 4:12 p.m. ET

Ms. Holmes said that her board was highly qualified — and well compensated for their advice.
Theranos’s star-studded board included George Shultz, a former secretary of state; Senator Sam Nunn; James Mattis, who later became defense secretary; and Henry Kissinger, a former secretary of state. Each was paid a $150,000 salary every year and given half a million shares. Some also received consulting salaries. Mr. Kissinger, for example, received $500,000 a year.

Nov. 23, 2021, 3:50 p.m. ET
Nov. 23, 2021, 3:50 p.m. ET

Ms. Holmes said that she shared Theranos’s data and processes with the FDA, including that Theranos was using conventional analyzers.
She shared it because she was confident the FDA would protect her trade secrets, she said.
This feeds into her earlier argument about trying to hide the use of third-party devices from Walgreens in order to hide trade secrets — and into a larger theme that she was not trying to conceal problems with Theranos’s devices.

Nov. 23, 2021, 3:43 p.m. ET
Nov. 23, 2021, 3:43 p.m. ET


Theranos’s headquarters in Palo Alto, Calif., in 2015.Credit...Jim Wilson/The New York Times


The fraud trial of Elizabeth Holmes, who founded the failed blood testing start-up Theranos, has plenty of implications for Silicon Valley.
Her rise and fall has been held up as the ultimate test of Silicon Valley’s fake-it-until-you-make-it culture. At some hot start-ups, it is not uncommon for founders to inflate their revenue or hype their company’s products to raise money and secure deals, even if their products may not quite do what was advertised, said Margaret O’Mara, a University of Washington professor who has written a book on the history of Silicon Valley.
Ms. Holmes also wrapped herself in the mythology of the tech industry. The Stanford University dropout styled herself after the late Apple co-founder Steve Jobs, headquartered her company in Palo Alto, Calif., and benefited from a laudatory media.
The outcome of Ms. Holmes’s trial may be a referendum on that behavior, lawyers and others said. If Ms. Holmes is found guilty, start-up entrepreneurs may be more careful with the claims they make to investors and partners, knowing that they could be charged with fraud, said Neama Rahmani, president of the West Coast Trial Lawyers and a former federal prosecutor.
But a “a non-guilty verdict will vindicate a Silicon Valley culture of celebrating aggressive innovation at the expense of the complete and whole truth,” said Jeffrey M. Cohen, an associate professor at Boston College Law School.
Still, some in Silicon Valley have pushed back against the idea that Ms. Holmes and Theranos represented the typical start-up. That’s because Ms. Holmes raised the bulk of her money from investment firms that represented wealthy families, and not traditional venture capital firms that generally invest in fast-growing tech start-ups. Ms. Holmes was also building medical devices, not software as with many other start-ups.
For that reason, Ms. O’Mara said, some Silicon Valley insiders might dismiss the importance of the outcome.

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Nov. 23, 2021, 3:39 p.m. ET
Nov. 23, 2021, 3:39 p.m. ET Erin Griffith
San Jose, Calif.


Theranos arranged an article with The Wall Street Journal at the advice of its public relations advisors to establish itself separately from Walgreens. She went to Joe Rago, a member of The Journal’s editorial board, because he had connections with members of Theranos’s board and focused on healthcare and economics.
Ms. Holmes said that she had an opportunity to review the 2013 article, titled “The Breakthrough of Instant Diagnosis” before it was published. 
Ms. Holmes sent the article to potential investors. In opening statements, Robert Leach, a prosecutor for the United States, characterized that article as “falsely suggesting it had revolutionized blood testing with a blood analyzer with a finger stick.”

Nov. 23, 2021, 3:29 p.m. ET
Nov. 23, 2021, 3:29 p.m. ET

Ms. Holmes said that she did not personally research every statement in Theranos’s marketing materials, but that she did not approve any materials she thought were inaccurate.
Prosecutors had brought up statements about Theranos’s technology -- made on its website and in marketing materials -- that they argued were inaccurate.

Nov. 23, 2021, 3:28 p.m. ET
Nov. 23, 2021, 3:28 p.m. ET Erin Griffith
San Jose, Calif.


Dr. Rosendorff had testified that he was particularly concerned about Theranos’s launch of its blood tests with Walgreens and did not believe the company’s technology was ready. Ms. Holmes said that the launch was delayed from March 2013 until September 2013 because the two companies weren’t ready.

Nov. 23, 2021, 3:21 p.m. ET
Nov. 23, 2021, 3:21 p.m. ET

Ms. Holmes is continuing to try to pass blame to Theranos's lab employees such as Adam Rosendorff, a former lab director at Theranos who spent six days on the stand, the longest of any witness thus far.
Ms. Holmes said that Dr. Rosendorff was responsible for deciding whether a blood test worked, and that she did not have the training to know if a test was good for use. She said she was not aware of any tests in use that didn't work, and that she would not have permitted this. She said that she did not pressure anyone to sign off on a validation.
Dr. Rosendorff had testified about issues he experienced in the lab. Ms. Holmes said that she told him Theranos would do “whatever it takes” for him to have time to fix the tests.

Nov. 23, 2021, 3:15 p.m. ET
Nov. 23, 2021, 3:15 p.m. ET

Ms. Holmes’s testimony is trying to address a key point for the prosecution: that she deceived partners and investors by concealing these devices’ use. Ms. Holmes is trying to recast that argument by saying that Theranos made modifications to the third-party devices that the company wanted to keep secret, so that rivals could not recreate them and harm Theranos’s business model.

Nov. 23, 2021, 3:14 p.m. ET
Nov. 23, 2021, 3:14 p.m. ET Erin Griffith
San Jose, Calif.


Ms. Holmes did not publicly disclose that Theranos was using third-party devices for blood tests, she said. When asked if she told Walgreens, she said, “Not in that way.”
Instead, she said Theranos modified the third-party devices so they used less blood. Then she sought patent protection for those changes because she viewed them to be a trade secret.

Nov. 23, 2021, 3:00 p.m. ET
Nov. 23, 2021, 3:00 p.m. ET Erin Griffith
San Jose, Calif.


Ms. Holmes spent a lot of time explaining, in scientific detail, some of the issues that Theranos ran into on its devices. It was a build-up to discuss the decision to start using commercially available machines from companies like Siemens for blood tests.
The most blockbuster claim against Ms. Holmes and Theranos was that the company only used its own machines for a dozen different tests, even as it said it could do hundreds or thousands.

Nov. 23, 2021, 2:40 p.m. ET
Nov. 23, 2021, 2:40 p.m. ET

Court is back in session. Ms. Holmes tried to make eye contact with the jurors as they filed in, but only one juror appeared to look up.

Nov. 23, 2021, 2:32 p.m. ET
Nov. 23, 2021, 2:32 p.m. ET Erin Griffith
San Jose, Calif.


The break is about to end and Ms. Holmes is chatting with the court reporter. Before the break, she had testified about the overheating problems caused by having too many Theranos devices packed together in one spot.

Nov. 23, 2021, 2:30 p.m. ET
Nov. 23, 2021, 2:30 p.m. ET


Elizabeth Holmes believed.
That argument was a line of defense that Ms. Holmes, the founder of the blood testing start-up Theranos, brought up on Monday during testimony in her fraud trial. She argued, essentially, that she could not have deceived Theranos’s investors, patients and others about how well her company’s medical devices worked because she believed the technology to be real. After all, that was what her employees told her, she said.
On Tuesday, in her third day of testimony, Ms. Holmes further built up that defense.
During the proceedings, Kevin Downey, Ms. Holmes’s lawyer, brought up emails and presentations from senior Theranos scientists such as Ian Gibbons and Surekha Gangakhedkar in which they gave positive reports about the start-up’s devices. Ms. Holmes publicly claimed Theranos’s devices were revolutionary, but The Wall Street Journal exposed in 2015 that the machines didn’t work.
In one case, Mr. Downey displayed a February 2010 email from Mr. Gibbons to Ms. Holmes. Ms. Holmes had asked about various blood tests, and he responded, “Essentially all are possible in the proposed system.” She said that she took this to mean that these tests were being run on Theranos’s system.
In another case, Ms. Holmes emailed her scientists to ask them about a presentation they had prepared. When Mr. Downey asked why she had sent the email, she said, “Our scientists had said that, and so I wanted to better understand that statement.”
Mr. Downey also tried to show that Ms. Holmes had relied on outside experts and her board of directors. He brought up a study done by scientists at Johns Hopkins University that concluded that Theranos’s technology was “novel and sound.”
“Our team was really excited about this,” Ms. Holmes said. “This was some of the best laboratory experts in the world.”
Mr. Downey also pointed out that Theranos’s board in 2010 included Don Lucas, an investor who backed Oracle and Adobe; Pete Thomas, a longtime investor at the venture capital firm IVP; and Channing Robertson, a Stanford University professor.
One person Ms. Holmes hasn’t fully discussed is Ramesh Balwani, Theranos’s former chief operating officer and her former boyfriend, who is known as Sunny. In three days on the stand, she has mentioned his name only once, to note that he was involved in the Hopkins study.
But there also has been a dissonance in Ms. Holmes’s testimony. She has talked confidently about Theranos’s technology during her testimony, a contrast to how her lawyers have tried to argue that she depended on other people to tell her how the technology worked.

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Nov. 23, 2021, 2:09 p.m. ET
Nov. 23, 2021, 2:09 p.m. ET


As she has defended herself in court, Elizabeth Holmes has made the arguments that longtime lawyers anticipated.
Ms. Holmes, the founder of the failed blood testing start-up Theranos, has sought to shift blame onto other Theranos employees with more technical skills. She has tried to poke holes in prosecutors’ arguments that she lied about working with drug companies. And, the lawyers said, she has tried to appear sympathetic and down to earth by showing up to court hand-in-hand with her mother and wearing clothing appropriate for a courtroom instead of the black turtlenecks she was once famous for wearing.
It’s all part of painting the picture, they said, of Ms. Holmes as a well-meaning but ultimately unsuccessful executive, rather than someone who intentionally misled investors and should be convicted of fraud.
“This is exactly what you would expect,” said Neama Rahmani, the president of the law firm West Coast Trial Lawyers and a former federal prosecutor. “Generally speaking, when you go into these types of cases, there’s two types of defenses: ‘I didn’t know’ and ‘It wasn’t me.’”
Ms. Holmes, 37, has been charged with 11 counts of fraud and conspiracy to commit fraud. She has pleaded not guilty. If convicted, she faces up to 20 years in prison.
Mr. Rahmani said that Ms. Holmes’s attempts to blame others for the company’s problems while emphasizing her own ignorance was typical of fraud defendants. He said the tactic was also often used in money laundering and drug trials — cases where prosecutors have to prove that a defendant knew they were transporting drugs or that money came from illicit activities.
In Ms. Holmes’s case, she and her team “are going to do everything they can to distance themselves from that knowledge,” he said.
Jeffrey Cohen, an associate professor at Boston College Law School and a former federal prosecutor, said attempts to make Ms. Holmes appear ignorant were part of a larger strategy.
“What I would expect a defendant in a high-profile case to do is try to humanize themselves and make the jury see that they’re not just a corporate C.E.O., but a person with the flaws that any person might have who’s running a large corporation,” Mr. Cohen said. He added that having Ms. Holmes’s mother in the room “says to the jury that she could be a sympathetic character and not this mastermind of a fraudulent scheme.”
As for Ms. Holmes’s attempts to rebut arguments made by the prosecution, such as by pointing to studies Theranos did with drug companies, Mr. Rahmani said it was likely an effort to create uncertainty about Ms. Holmes’s culpability.
“They’re trying to paint this much more nuanced picture, because obviously all they need to do is establish reasonable doubt. They’re hoping to pick off a few jurors,” he said. “If they get some folks who are sympathetic or some people who are on the fence, that’s their path to success here.”

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Nov. 23, 2021, 1:57 p.m. ET
Nov. 23, 2021, 1:57 p.m. ET Erin Griffith
San Jose, Calif.


We are taking our morning break. Back soon.

Nov. 23, 2021, 1:55 p.m. ET
Nov. 23, 2021, 1:55 p.m. ET

Ms. Holmes’s testimony has shown an interesting tension between how confidently she talks about Theranos’s technology to the jurors, and how her defense is also trying to argue that she just relied on other people to tell her how it worked.

Nov. 23, 2021, 1:45 p.m. ET
Nov. 23, 2021, 1:45 p.m. ET

Ms. Holmes seems to be making an effort to explain Theranos’s technology in a way that jurors can understand. She described the inner workings of one Theranos device, saying it had an internal “robot” and that “the device calls the cloud to say, ‘What do I do with that storage?’”

Nov. 23, 2021, 1:34 p.m. ET
Nov. 23, 2021, 1:34 p.m. ET


Elizabeth Holmes, the founder of the blood testing start-up Theranos, testified on Tuesday about her personal role in one of the prosecution’s most damning pieces of evidence in her fraud case — and tried to flip the narrative.
That piece of evidence is a set of validation reports that documented studies of Theranos’s technology done in partnership with pharmaceutical companies and displayed the logos of major drug companies, including Pfizer and Schering-Plough. Ms. Holmes sent these reports to investors and partners as part of her pitch to get them to invest in and do business with Theranos.
A Theranos report implied endorsements from pharmaceutical companies including Schering-Plough and Pfizer.Investors and partners, including Wade Miquelon, the former chief financial officer of Walgreens, had previously testified that the outside endorsement had helped convince them to invest in and work with Theranos.
“My assumption was that both parties agreed to what was written,” Mr. Miquelon said of the Pfizer report. It was an important piece of diligence, he added, because “the pharmacy companies in general are much more adept at the lab work they do.”
But there was one problem, prosecutors said: The drug companies had not written or approved of the reports.
On Tuesday, Ms. Holmes said she had personally added the logos to the reports just before sending them Walgreens. But she said she had done so “because this work was done in partnership with those companies and I was trying to convey that.”
Ms. Holmes said she hadn’t meant to give the impression that the reports were prepared by the pharmaceutical companies.
“I’ve heard that testimony in this case, and I wish I’d done it differently,” she said.
Ms. Holmes’s lawyer, Kevin Downey, said Theranos had not hidden that it had added the logos from the pharmaceutical companies. In a bid to show that the companies may have been aware of the reports, he displayed a 2014 email from Ms. Holmes’s brother, Christian Holmes, who worked at Theranos, to various Pfizer executives. The email attached the report using Pfizer’s logo.

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Nov. 23, 2021, 1:22 p.m. ET
Nov. 23, 2021, 1:22 p.m. ET

Ms. Holmes said that Theranos called its formula for turning blood tests into small sample tests “Theranizing assays.” Her company had a patent for “Theranizing assays,” she testified.

Nov. 23, 2021, 1:16 p.m. ET
Nov. 23, 2021, 1:16 p.m. ET

Ms. Holmes said that Daniel Young, not her, was in put in charge of the plan for launching in Walgreens stores.
“He is an incredibly smart person who had done great work on our informatics team,” she said. “He had skills sets in modeling and data and we wanted to apply them.”
Again, this goes to the argument that Ms. Holmes was surrounded by other, more qualified, people that she trusted to tell her how Theranos’s technology was doing.

Nov. 23, 2021, 1:14 p.m. ET
Nov. 23, 2021, 1:14 p.m. ET

Ms. Holmes testified that Theranos devices were not included in Walgreens stores because Walgreens changed its mind.
Originally, Walgreens wanted Theranos devices in their stores, but the company decided it wanted to use a central lab because of “FDA and CMS reasons,” Ms. Holmes said, saying that Theranos lawyers had different opinions but ultimately agreed.
This required a change to their agreement.

Nov. 23, 2021, 12:35 p.m. ET
Nov. 23, 2021, 12:35 p.m. ET


Ms. Holmes leaving the courthouse on Monday.Credit...Jim Wilson/The New York Times


The trial of Elizabeth Holmes has everything: a charismatic, attractive and youthful female defendant; celebrities; sex; vast sums of money; the long shadow of Steve Jobs; lives of real people at risk.
If it’s one of the most famous criminal cases ever to come out of Silicon Valley, it also sometimes seems like the only one. Prosecutors in Northern California brought 57 white-collar crime cases in fiscal year 2020. Even after accounting for the effect of Covid, cases have plunged from the peak of 350 in 1995.
Not every white-collar case is a tech case or related to start-ups, which means there are only a handful of times each year when someone in Silicon Valley is accused of a crime.
There are a lot of complicated reasons for this shortage of courtroom action.
A frequent explanation is that it is the fault of a lackluster U.S. attorney’s office in San Francisco. Few prosecutors come to the Bay Area to make their reputations, and those that do — like Robert Mueller 20 years ago — soon move on to better jobs. Mr. Mueller took over the F.B.I.
It’s not just a local issue. Fighting white-collar crime has been less of a priority for the Department of Justice since the Sept. 11 attacks brought fears of widespread terrorism.
And for all the growing awareness of the power of tech companies, there is little public demand to hold them accountable. When David Anderson stepped down as U.S. attorney for the Northern District of California early this year, he did an interview with a radio station. None of the questions from the host or from callers dealt with Silicon Valley.
Mr. Anderson, a Trump appointee, had talked about making Silicon Valley a priority for his prosecutors. His first public appearance was on a panel titled “White Collar Crime in a High-Tech World.” But he was in office for two years, too few to really make an impact. The district has had an acting U.S. attorney, Stephanie Hinds, since March.
Yet another reason is that Silicon Valley is a very rich place. That does not make government prosecutions impossible. But it ensures that top-flight defense attorneys can be brought in, making cases like Ms. Holmes’s neither short nor simple.
Finally, there is a sense in Silicon Valley that failure — whether a company that went under or an investment that was lost — is best kept in the family, far away from prosecutors, regulators and the media. Investors are supposed to be sophisticated, and a case like Ms. Holmes’s can reveal just how foolish and naïve they were. The same is true of employees.
Better to just forget about anything suspicious than allege fraudulent activity. After all, you wouldn’t want to miss out on the next opportunity.

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Nov. 23, 2021, 12:05 p.m. ET
Nov. 23, 2021, 12:05 p.m. ET


White-collar defendants rarely take the stand because it opens them up to a potentially damaging cross-examination. Yet Elizabeth Holmes is testifying in her own defense.
Why take that chance?
Lawyers for Ms. Holmes, 37, may be betting that their client — who charmed investors and partners as she built Theranos to a $9 billion valuation before it collapsed — will be persuasive and charismatic enough to get 12 jurors on her side.
“They think they are behind, and they have a smart, likable, young, attractive witness,” said Neama Rahmani, who is the president of the West Coast Trial Lawyers and a former federal prosecutor. “And she thinks she’s going to talk her way out of it.”
Ms. Holmes’s testimony may also be the only way to show that she did not intend to deceive anyone, Mr. Rahmani said. She can speak about her relationship with Ramesh “Sunny” Balwani, 55, Theranos’s former chief operating officer and her former boyfriend. In court filings, she has said he was emotionally abusive and controlling. He has denied the allegations.
Ms. Holmes may also be hoping to present herself to the jury as a sympathetic figure. She had a baby in July and has showed up to the courtroom carrying a diaper bag and holding hands with her mother.
But by speaking in court, Ms. Holmes is taking a risk. That’s because she has previously made many statements about Theranos — both under oath and in media interviews — which prosecutors can grill her on.
“She’s going to be the best witness for herself, or the worst,” Mr. Rahmani said. “She may just kind of hang herself, so we’ll see.”

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Nov. 23, 2021, 11:57 a.m. ET
Nov. 23, 2021, 11:57 a.m. ET


People waiting in line to get inside of the courthouse on the third day of Ms. Holmes’s testimony. Credit...Jim Wilson/The New York Times


The testimony of Elizabeth Holmes, the founder of the blood testing start-up Theranos, has raised a renewed flurry of public interest in her fraud trial. And that has meant a more colorful scene outside the Robert F. Peckham Federal Courthouse in San Jose, Calif., where the trial is taking place.
Since it became clear that Ms. Holmes would take the stand this week, spectators and media began queuing outside the courthouse before 3 a.m. on Monday and Tuesday, shivering and burrowing into coats in the pre-dawn cold. The trial is not being broadcast and the only way to view the proceedings is to be in the courtroom or in an overflow room. Before Ms. Holmes’s testimony, people had arrived later to line up to get into the trial.
On Tuesday, Danielle Baskin, a spectator, also brought black turtlenecks, blond wigs and red lipsticks — a nod to Ms. Holmes’s signature look when she ran Theranos — as well as energy drinks with the handmade labels “Badder Blood,” “Bitter Blood” and “Better Blood.” She set up shop outside the courthouse before a security guard told her she couldn’t sell goods on federal property.
A spectator brought Elizabeth Holmes-inspired goods to sell in front of the courthouse, but was shooed away by a security guard.Credit...Erin Woo/The New York Times“I’m interested in the theatrics of how she bends words and shifts energy and how she crafts a story,” Ms. Baskin, 33, who drove from San Francisco with two friends, said of Ms. Holmes.
Ms. Baskin said she was the founder of Dialup, a voice chat app, and added that she was not a fan of Ms. Holmes. “I don’t have sympathy for her because she was lying the whole time, and I know women with brilliant ideas who can’t put on an act and fail at fund-raising,” she said. “She’s an example of why the system was broken.”
Emily Saul, a reporter for the podcast studio 3uncanny4, has become the unofficial keeper of the line, noting everyone who arrives and standing on a bench inside the courtyard once the gates open to corral people.
On Monday, the first person arrived at 12:15 a.m., saving a spot for a friend of the Holmes family who “preferred to be anonymous.” At 3:45 a.m., two blond women known as “Holmies,” who had dressed in black turtlenecks during opening statements in September, arrived dressed in different clothing. They hugged Ms. Holmes and her boyfriend, Billy Evans, and sat in the row reserved for the defense.
On Tuesday, spectators included a high school student and her mother from Palo Alto, Calif. Their presence led to a wave of laughter when “Karrie and Karrie’s mom” were announced in line.
At 5 a.m., the Starbucks around the corner opened. People left the line and returned clutching red holiday cups and paper bags with bagels or breakfast sandwiches. When the courthouse gates opened around 6:15 a.m., more than 50 people were in line. Only 34 fit in the courtroom. At 7:30 a.m., the doors to the courthouse opened.
Ms. Holmes arrived around 8:15 a.m., flanked by Mr. Evans and her mother and surrounded by cameras and microphones.
“God bless you, girl boss!” one person called as she entered the courthouse.

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Nov. 22, 2021, 5:26 p.m. ET
Nov. 22, 2021, 5:26 p.m. ET


Elizabeth Holmes, the Theranos founder, leaving the federal courthouse in San Jose, Calif., on Monday.Credit...Jim Wilson/The New York Times


SAN JOSE, Calif. — After weathering months of accusations that she lied to get money for her blood testing start-up, Theranos, Elizabeth Holmes, the embattled Silicon Valley entrepreneur who is on trial for fraud, sharpened her defense on Monday.
In just under two hours of testimony, Ms. Holmes pushed back against accusations that she had lied about Theranos’s work with drug companies. She also pointed the blame at the scientists and doctors who had worked at her start-up, saying she believed what they had told her about Theranos’s technology.
And throughout it all, Ms. Holmes’s defense bolstered the idea it has been pushing since the start of the trial: She may have made mistakes, but failure is not a crime.
“We thought this was a really big idea,” Ms. Holmes said about Theranos’s machines, which she once promised could run a long list of medical tests from just a few drops of their blood.
It was her second day of testimony in a trial that has gripped Silicon Valley and become a referendum on start-up culture and just how far entrepreneurs will take their hubristic claims of changing the world. For her lawyers, the idea on Monday was to show the kernel of truth that may have existed in some of the most blatant misrepresentations that prosecutors attributed to her.
Ms. Holmes, 37, has been charged with 11 counts of fraud and conspiracy to commit fraud. She has pleaded not guilty. If convicted, she faces up to 20 years in prison.
Her testimony has been the star attraction at a trial where more than 30 witnesses have been called over the past three months into a San Jose, Calif., courtroom to testify. Ms. Holmes had watched the proceedings quietly, her expression obscured behind a medical mask. On Friday, the prosecution had rested its case.
Ms. Holmes is the rare Silicon Valley executive to be tried on fraud charges. While the world of tech start-ups is known for its culture of hustle and hype, few have risen as high or fallen as dramatically as Theranos — and even fewer of their leaders have been indicted on accusations that they lied to investors. Over 13 years, Theranos raised nearly $1 billion in funding, valuing it at $9 billion. After The Wall Street Journal revealed in 2015 that Theranos’s technology did not work as advertised, the company unraveled. It shut down in 2018.
Ms. Holmes’s decision to testify is a risky one that shocked the courtroom out of its Friday afternoon lull last week. She has opened herself up to cross-examination by prosecutors and also risks perjury.
But experts have argued that she had no choice but to defend herself, given the evidence presented by prosecutors. That has included text messages that showed Ms. Holmes was aware of Theranos’s technology problems and testimony about faked demonstrations of its abilities. Prosecutors also revealed that after an employee, Erika Cheung, spoke to regulators about problems in the Theranos lab, the start-up hired a private detective to follow her.
“They think they are behind, and they have a smart, likable, young, attractive witness,” Neama Rahmani, the president of the West Coast Trial Lawyers and a former federal prosecutor, said of Ms. Holmes. “And she thinks she’s going to talk her way out of it.”
One key point made by prosecutors was that Theranos could never conduct more than 12 different blood tests on its own machines. It secretly used blood analysis machines from companies like Siemens to run most of its tests, but proclaimed it could do hundreds or thousands at various times.
Ms. Holmes’s lawyers have for weeks tried complicating the prosecution’s narrative. They have pointed to patents created by Theranos. They have hammered investors for not doing enough diligence on the start-up before eagerly writing checks to fund it. And they painted Ms. Holmes as inexperienced and unqualified to run a lab, directing blame for Theranos’s failure at those who were experienced and qualified.
But on the stand, Ms. Holmes presented herself as an impressive and ambitious chief executive when describing the early days of Theranos. She detailed a patent that bore her name for an early concept of the company, as well as the help she got from Channing Robertson, a respected scientist and Stanford University professor who joined Theranos’s board. She was relaxed and confident, smiling widely and nodding before answering questions.
On Monday, her direct examination continued in chronological order. Her lawyers walked through the details of preliminary studies that Theranos had done with a number of drug companies in 2008, 2009 and 2010. They also noted that Theranos’s technology had performed well in those early studies with Merck, AstraZeneca, Centocor, Bristol Myers Squibb and others.
Representatives from Pfizer and Schering-Plough testified earlier that they had evaluated Theranos’s technology and had come away unimpressed.
But the point of Monday’s testimony was to show that Theranos did work with drug companies rather than not at all. Ms. Holmes testified not only about the clinical studies but also about a study published in a peer-reviewed journal.
That strategy allowed her to focus on Theranos’s early successes and the conversations she had with each potential partner, while glossing over the outcomes of those conversations.
Ms. Holmes also tried to shift the blame, noting that she learned about Theranos’s technology from the scientists and doctors who worked in the company’s lab. She testified that she believed them when they said the technology worked. The implication: Ms. Holmes could not have intended to deceive investors if she believed the technology was real.
Prosecutors face a challenge in proving that Ms. Holmes intended to defraud investors. The push-pull between showing that she was aware of Theranos’s problems and that she simply relied on what others told her has been a recurring theme in testimony.
Emails between Ms. Holmes and Ian Gibbons, a former chief scientist at Theranos, also painted a rosy picture of Theranos’s technology.
“I understood that the four series could do any blood test,” Ms. Holmes said, referring to a version of Theranos’s machines, described by Mr. Gibbons.
Judge Edward J. Davila of U.S. District Court for the Northern District of California instructed jurors that many exhibits, including the emails between Ms. Holmes and her lab workers, should be taken as an indication of her “state of mind” rather than the truth of the situation.
Monday’s court session ended with Judge Davila again rebuking spectators over the volume of their typing, reminders of the many interruptions and delays that have plagued the trial since it began in August.
Direct testimony of Ms. Holmes is expected to last through Tuesday. She will then face cross-examination from prosecutors.

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Nov. 22, 2021, 11:43 a.m. ET
Nov. 22, 2021, 11:43 a.m. ET


The government’s case against Elizabeth Holmes, the founder of Theranos, featured several key pieces of evidence that showed she intentionally deceived doctors, patients and investors in the blood testing start-up.
They included:
A fraudulent report
In 2010, Theranos created a 55-page report that prominently displayed the logos of the pharmaceutical companies Pfizer, Schering-Plough and GlaxoSmithKline. Investors such as Lisa Peterson, who manages investments for the wealthy DeVos family, and Walter Mosley, whose clients include the Walton family, testified that the report had helped persuade them to invest in Theranos.
The problem? Pfizer, Schering-Plough and GlaxoSmithKline had not prepared or signed off on the report. While prosecutors did not establish that Ms. Holmes created the report, witnesses like Daniel Edlin, a former Theranos senior product manager, testified that she had signed off on all investor material.
A Theranos report implied endorsements from pharmaceutical companies including Schering-Plough and Pfizer.An investor letter
Theranos spent years discussing with the Department of Defense the possible deployment of its technology in the battlefield, but no partnership materialized.
Yet Ms. Holmes told potential investors in a letter that Theranos had signed contracts with the U.S. military — claims that helped persuade them to invest, the investors testified.
“We really relied on the fact that they had been doing work for pharma companies and the government for years,” Ms. Peterson said.
A Theranos letter about the start-up’s work with pharmaceutical companies and the military.Internal emails
Emails between Theranos employees made up the bulk of the prosecution’s exhibits. Some of the emails showed when Theranos hid device failures, removed abnormal results from test reports and fudged demonstrations of its blood testing.
In one case, Mr. Edlin asked a colleague for advice on how to demonstrate Theranos’s technology for potential investors.
Michael Craig, a Theranos software engineer, recommended that Mr. Edlin use the demo app, a special setting on Theranos’s devices that said “running” or “processing” if an error had taken place, rather than display the mistake.
The app would hide failures from the client, Mr. Craig wrote in an email.
“Never a bad thing,” Mr. Edlin replied. “Let’s go with demo, thanks.”
Emails between Theranos employees as they prepared to show the company’s technology. 
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Nov. 22, 2021, 11:31 a.m. ET
Nov. 22, 2021, 11:31 a.m. ET


Adam Rosendorff, former lab director at Theranos, left, arriving at court last month.Credit...David Paul Morris/Bloomberg, via Getty Images


From the start, prosecutors have argued that Elizabeth Holmes intentionally deceived investors, doctors and patients as she sought investments and partnerships for Theranos, her once highflying blood testing start-up.
In opening statements on Sept. 8, Robert Leach, the assistant U.S. attorney who is the lead prosecutor in the case, laid out the government’s central thesis: that Ms. Holmes courted investors and commercial partners with false claims about her company’s technology and its relationships with pharmaceutical companies and the military.
“Out of time and out of money, Elizabeth Holmes decided to lie,” he repeatedly declared.
To make that case, prosecutors called 29 witnesses to the stand. They included eight former Theranos employees, six investors, three commercial partners, two doctors and three patients. From a star-studded list of nearly 200 people the government had listed as potential witnesses, the highest-profile person to appear was former Defense Secretary James Mattis, who had served on Theranos’s board.
Prosecutors presented evidence to show that Ms. Holmes perpetrated deceit, including that she knew of technology demonstrations that hid Theranos’s failures and was aware the company made false claims of working with the military. They also showed that Theranos had used a report with a pharmaceutical company’s logo to imply it had that company’s backing, even though the firm had not signed off on the report. Investors and partners testified that those claims had helped persuade them to give Theranos their business and money.
The prosecution also detailed the dysfunction within Theranos’s lab, which handled the blood tests. Theranos had trumpeted its claim that its tests could discern various illnesses in patients with just a drop of blood.
But Adam Rosendorff, one of Theranos’s former lab directors, spent six days on the stand explaining that the tests repeatedly produced inaccurate and irregular results. Other lab directors testified that they had essentially been figureheads; one spent just five to 10 hours at Theranos over his tenure.
Daniel Edlin, a former senior product manager and Holmes family friend, testified that Ms. Holmes had signed off on Theranos’s marketing and investor materials. He also said Ramesh Balwani, the chief operating officer and Ms. Holmes’s onetime boyfriend, who is known as Sunny, had deferred to her when the two of them disagreed.
“Generally, she was the C.E.O., so she had the final decision-making authority,” Mr. Edlin said.

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Nov. 22, 2021, 11:00 a.m. ET
Nov. 22, 2021, 11:00 a.m. ET


Theranos’s blood testing machine at the company’s headquarters in 2015.Credit...Jim Wilson/The New York Times


In 2018, the United States charged Elizabeth Holmes and her business partner, Ramesh “Sunny” Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.
The indictment accuses the pair of engaging in a “scheme, plan and artifice to defraud investors as to a material matter.”
In other words, they are accused of lying about Theranos’s business and technology to get money. The lies outlined in the indictment include claims Theranos made about its relationship with the military and the status of its partnership with Walgreens. Prosecutors also say that Theranos faked demonstrations of its technology and falsified validation reports from pharmaceutical companies and the financial health of its business.
Wire fraud is a felony that carries a maximum penalty of 20 years and potential fines. Theranos also paid a $500,000 fine to settle civil securities fraud charges with the Securities and Exchange Commission in 2018. It also settled multiple lawsuits with investors and partners before dissolving that year.
Since the criminal indictment, the cases of Ms. Holmes and Mr. Balwani have been separated. Mr. Balwani faces trial next year. Further, some of the charges against Ms. Holmes have been dropped and others added. As of today, Ms. Holmes faces 11 counts of fraud and conspiracy to commit fraud.
She has pleaded not guilty.

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Source: New York Times

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