Elizabeth Holmes trial: Cross examination of former Theranos CEO begins

Photograph: Stephen Lam/Reuters

Federal prosecutors will begin their cross examination of Theranos founder Elizabeth Holmes on Tuesday, in Silicon Valley’s highest profile trial in decades.

Holmes is entering her fifth day on the stand, where she is fighting charges that she lied about the company’s core blood-testing technology. She faces 11 counts of fraud and up to 20 years in prison.

On Monday, Holmes tearfully alleged she was emotionally and physically abused by her former lover and business partner, Sunny Balwani. Balwani, who faces his own fraud trial in 2022, has strongly denied these accusations.

Holmes recounted how she met Balwani, who is nearly 20 years her senior, while she was still in high school. The two began a romantic relationship when she dropped out of Stanford University in 2003 to found Theranos, the startup she led as CEO for the next 15 years.

Balwani berated her and instructed her to “kill” her former self in an effort to succeed in business, Holmes said, controlling what she ate and how she spent her time. Holmes testified that if she didn’t do what Balwani said, he would yell and tell her he was “so disappointed in my mediocrity”.

The defense wrapped up its questioning of Holmes late Monday afternoon. Starting Tuesday morning, government prosecutors are expected in cross examination to attack Holmes’s assertions that she did not know about the failures of the company’s proprietary tests.

Holmes previously testified she believed Theranos’ technology to be more accurate than it was due to successful early trials. She cited studies conducted by Schering-Plough (a pharmaceutical firm that later became Merck) and Pfizer, saying that at the time the numbers meant “our system was working well”.

She also previously addressed the bombshell evidence introduced by the prosecution that she intentionally doctored documents to include logos of major pharmaceutical companies, which corporate partners took to mean they had endorsed Theranos technology.

Holmes said she did so not to imply that the companies had vetted the technology but “because this work was done in partnership with those companies and I was trying to convey that”.

“I wish I had done it differently,” Holmes told jurors.

Holmes was the third witness called by the defense after the prosecution spent 11 weeks presenting its case. Government attorneys called more than two dozen witnesses including former employees, investors and patients who testified that Theranos’ blood-testing devices did not work as advertised, returning inaccurate results.

Witnesses also said many blood tests were being carried out by external labs rather than on Theranos devices.

In opening arguments, Holmes’ defense attorney Lance Wade painted a picture of a hardworking young female executive caught up in the Silicon Valley culture that encourages entrepreneurs to push cutting-edge ideas.

“In the end, Theranos failed, and Ms Holmes walked away with nothing,” he said. “But failure is not a crime – trying your hardest and coming up short, is not a crime.”

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