Home » Lifestyle » Theranos founder Elizabeth Holmes’s trial: Prosecutors must show intent
Theranos founder Elizabeth Holmes’s trial: Prosecutors must show intent
Trial under way for Theranos CEO Elizabeth Holmes
Jury selection begins for Theranos CEO Elizabeth Holmes. FOX Business’ Lydia Hu with the latest.
Silicon Valley startups are often perceived to be walking a line between exaggeration and deception in promoting their products. Federal prosecutors trying Theranos Inc. founder Elizabeth Homes in California must convince a jury that she didn’t believe her own hype.
Ms. Holmes’s trial is slated to begin Wednesday, when her lawyers and prosecutors for the U.S. attorney’s office for the Northern District of California make their opening statements, kicking off what is expected to be several weeks of witness testimony. Ms. Holmes is the rare chief executive to personally go on trial, facing charges of defrauding patients and investors about the nature of her startup’s blood-testing technology.
Theranos and Ms. Holmes regularly claimed that the company’s machines could test for a range of blood conditions using just a few drops of blood taken from a finger prick. Their promises to revolutionize the healthcare industry put Ms. Holmes on magazine covers and vaulted its valuation to over $9 billion.
Prosecutors allege the technology was unreliable, inaccurate and known to be so, despite Ms. Holmes’s public claims to the contrary. The Wall Street Journal first reported on problems at Theranos in 2015, and the company shut down three years later amid scrutiny from regulators and prosecutors. Some patients and doctors reported receiving inaccurate results from Theranos tests, underpinning prosecutors’ accusations.
The challenge for prosecutors is showing that Ms. Holmes’s salesmanship of her blood-testing technology was intended to deliberately mislead investors and patients, said white-collar crime defense attorneys and former prosecutors.
Jury selection begins in trial of Elizabeth Holmes
Theranos CEO Holmes faces wire fraud and conspiracy charges. Payne Capital Management President Ryan Payne and trial attorney Heather Hansen discusses the latest updates from the case.
Amy Deen Westbrook, a professor at Washburn University School of Law whose research focuses on anticorruption initiatives, said such a showing would be difficult.
"They have to prove she knew it was false and she said it anyway. It’s much, much harder to prove," Ms. Westbrook said. "You’ve got a group of people there in the room and in the whole world of Silicon Valley that understand that most startups fail," regardless of whether founders believe their products will succeed.
Ms. Holmes has pleaded not guilty to 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. Neither her lawyers nor a spokesperson for the U.S. attorney’s office for the Northern District of California responded to questions for this article.
ELIZABETH HOLMES TRIAL: JURY SELECTION SET TO BEGIN IN THERANOS FRAUD CASE
Prosecutors for the district, which includes Silicon Valley, have struggled with high-profile cases that could shape the culture of the technology industry, said white-collar crime lawyers in the area and former prosecutors. Convicting Ms. Holmes could make founders more cautious about promises they might not be able to fulfill, white-collar attorneys said. But they cautioned that other startup founders might view Ms. Holmes as an outlier.