The 37-year-old entrepreneur charmed heavyweight investors, dazzled the media, and has become a cult feminist figure, but now faces ‘the biggest sales meeting of her life’
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 duped investors into funding her doomed biotech company.
But for an hour before the close of court on Friday, she removed her mask and took the stand in San Jose, California after the prosecution rested its case.
Ms Holmes has pled not guilty to 11 counts of wire fraud, with each count carrying a penalty of up to 20 années de prison.
She began by telling the packed courtroom how she dropped out of Stanford University in 2003 to found Theranos using her savings, with as business plan to “develop a library of tests and try to help pharma companies get drugs to market faster”.
“I was doing it on my own,” elle a dit. “I started working all the time… trying meet people who could help me build this.”
Because Ms Holmes has decided to testify for the defence, it will also allow federal prosecutors to cross-examine her. The trial is only being heard three days a week meaning that cross-examination is not likely to begin until after Thanksgiving.
Defendants are not required to testify in their own defence during US criminal trials, and defence attorneys can avoid taking this route if they feel their client may alienate a jury.
The trial is being closely watched as a de facto referendum on Silicon Valley and its culture of bending the truth to build hype and secure funding for prototype products.
Ms Holmes herself has become a cult figure. Some had mocked her attempts to style herself after Steve Jobs with a uniform of black turtlenecks, while others describe her as an example of sexist double standards and even laud her, often semi-ironically, as a feminist icon.
‘Failure is not a crime’, say defence lawyers
Theranos raised more than $940million (£699m) from investors before it was dissolved in 2018. Those investors included powerful figures like media tycoon Rupert Murdoch, Oracle founder Larry Ellison, and the family of former Trump administration education secretary Betsy DeVos.
The start-up achieved a valuation of $9bn on the back of Ms Holmes’s claim to have invented a revolutionary compact-testing machine capable of getting results from a tiny pinprick of blood.
Yet those promises began to unravel in 2015 lorsque Le journal de Wall Street exposed problems with the technology, beginning a spectacular implosion that has spawned a book, a documentary, a podcast series and a forthcoming TV drama.
Prosecutors now accuse 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 pharmacies or supermarkets without a typical needle.
“Out of time and out of money, Elizabeth Holmes decided to lie,” said lead prosecutor Robert Leach.
Ms Holmes insists she did nothing wrong. Her lawyers claim that she “naively underestimated” the challenges for her business, painting a picture of a driven young woman fighting for her vision in a culture that encourages founders to be bold.
“À la fin, Theranos failed, and Ms Holmes walked away with nothing,” said her lawyer Lance Wade in his opening argument. “But failure is not a crime. Trying your hardest and coming up short is not a crime.”
Witnesses included patients, whistleblowers, and General James ‘Mad Dog’ Mattis
Over the span of 11 semaines, the prosecution has called 29 witnesses to testify against her including company insiders, whistleblowers, et former board member and Trump administration Secretary of Defense, General James “Mad Dog” Mattis.
“There became a point where I didn’t know what to believe about Theranos anymore,” said Gen Mattis, who had invested $85,000 of his savings in the company, and told Ms Holmes: “I believe in what you are doing.”
Prosecutors made extensive use of video footage of Ms Holmes from an interview with Forbes journalist Roger Parloff for a cover story which Theranos later used as part of its pitch to investors.
In one clip, Ms Holmes claimed her so-called “Edison devices” could run “plus que 1,000 tests”, compared to the 600 then available from established testing firm 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 his doctor Mark Burnes testified that Theranos had given them wildly varying prostate cancer screenings, with two showing very high results and two showing very low ones. Des mois plus tard, Dr Burnes said, Theranos sent him a letter voiding the high ones.
Prosecutors also showed the jury a due diligence report commissioned by Theranos featuring the logos of pharma companies such as Pfizer and Schering-Plough.
A scientist at Pfizer testified that it had never approved the use of its logo, and a Walgreens executive who oversaw a $140 million investment in Theranos said he had believed the logos were real.
In cross-examination, lawyers for Ms Holmes sought to show that witnesses did not do proper due diligence on Theranos, with some investing despite seeing no audited financial statements or consulting no outside experts.
‘This is the biggest sales meeting of her life’
Until Friday, Ms Holmes had simply sat impassively in court.
Legal experts described Ms Holmes’ testimony as a risky move, but said it could give her a chance to show off the magnetic charisma that many prosecution witnesses said she exerted over those she dealt with.
“Her whole life has been sales,” Michael Weinstein, a white collar criminal defense lawyer with Cole Schotz, told the Wall Street Journal. “This would be the biggest sales meeting of her life.”
Ms Holmes’s team could also question her about her romantic relationship with Theranos executive Ramesh “Ensoleillé” Balwani.
In earlier court documents she has said that he abused her emotionally and physically, controlling how she slept, how she dressed and what she ate, and the defence team said on Friday that trusting him was one of Ms Holmes’ biggest mistakes.
A lawyer for Mr Balwani said in a filing that he “unequivocally denies that he engaged in any abuse at any time”. He has not yet testified in Ms Holmes’ case, and will face similar charges next year.
Before her fall from grace, many had lauded Ms Holmes as a rare example of women’s power in Silicon Valley, whose biggest companies are dominated by men and have often faced accusations of sexism.
Ellen Pao, a tech investor and former chief executive of Reddit, has argued that male chief executives and founders “just aren’t held accountable” in the same way as Ms Holmes, calling for prosecutors to go after them too.
“Questionable, immoral, even dangerous behavior has run rampant in the male-dominated world of tech start-ups,” elle a écrit. “Time and again, we see that the boys’ club that is the tech industry supports and protects its own.”
Ms Holmes has also attracted a following among young women on TikTok, who call themselves “Holmies” with varying degrees of irony. One video-maker praises her for having “made billions over a complete lie”.
“The idea of a woman pretending to have a very masculine quality in order to gain trust and attract investors is quite the reflection of female entrepreneurship,” influencer Serena Shahidi told Elle magazine. A Holmes-themed shop on Etsy sold more than 1,200 masques, T-shirts and mugs.