American businesswoman Elizabeth Holmes is under fire for lying, cheating and defrauding investors who backed Theranos, her health technology company.
Silicon Valley entrepreneur Elizabeth Holmes’s journey shows that not all Ivy League-dropout stories are those of success. At 19, Holmes dropped out of Stanford to start Theranos, a health-tech company that set out to revolutionize healthcare by detecting diseases with a single drop of blood. The idea was innovative and promising, so much so that Vice President Joe Biden called it “the future of laboratory science”. Seeing its potential, investors poured over US$400 million into the business.
However, it was later found that the company’s “breakthrough” technology was anything but. A 2015 Wall Street Journal report exposed Theranos, revealing that the company’s technology did not work. What’s more? Holmes knew it, though she claimed that she didn’t. Her case points to the importance of researching your idea well, accepting your limitations, and knowing when it’s time to call it quits, especially as a start-up.
The allegations against Holmes
In 2018, the company dissolved and, soon after, Holmes and Former President of Theranos Ramesh Balwani—also her ex-boyfriend—were charged for defrauding investors. She has been charged with two counts of conspiracy and ten counts of wire fraud. She was also accused of lying to investors about her product and hiding the fact that her technologies didn’t work. Holmes has pleaded innocent on all counts.
The trial begins
The trial started on Wednesday, September 8, 2021. Dozens of cameras and media personnel along with women dressed like Holmes in support of her (claiming to be her “fans”) gathered outside the courthouse. Supported by her mother and partner Billy Evans, she sat, facing 12 jurors—seven men and five women—who were chosen after a rigorous three-day process.
The Lead Prosecutor Rober Leach declared in an opening statement, “This is a case about fraud, about lying and cheating to get money.” According to him, as Holmes and Balwani ran out of money and time, they decided to mislead investors and people. Holmes’s Attorney Lance Wade, however, painted the picture of a young, ambitious Silicon Valley founder who simply tried and failed, as many have. He affirmed, “Elizabeth Holmes did not go to work every day intending to lie, cheat and steal. The government would have you believe her company, her entire life, is a fraud. That is wrong. That is not true.”
Holmes: just another Silicon Valley failure?
Wade went on to add that Holmes “worked herself to the bone” for 15 years, pouring her “heart and her soul” into Theranos. Despite her efforts, Theranos failed. He said, “Ms. Holmes walked away with nothing. But failure is not a crime. Trying your hardest and coming up short is not a crime.” Wade argued that the jurors must factor in Holmes’s age, mentioning that she was a young CEO who “naively underestimated” business obstacles. On Holmes defrauding investors, he said that investors are already aware of the risks involved in investing in Silicon Valley companies.
A step back for women in science and technology
The prosecutor has lined up many witnesses—investors, media moguls, patients who were wrongly diagnosed by Theranos and more—to emphasize the impact of her negligence. Many feel that the CEO’s dereliction is a step back for women in science. Still, according to legal experts, that’s exactly what might work in her favor. They believe that Holmes might be at an advantage as she needs to convince only one juror that she is being treated differently because she is a woman in science. If she will succeed in doing so, no one knows.
The trial will last for 13 weeks, with Holmes expected to defend herself and Balwani’s trial to begin soon.
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