Theranos Scandal: CEO Elizabeth Holmes Heads To Trial
The first phase of the trial of Theranos founder and CEO Elizabeth Holmes will begin on Tuesday. Holmes is charged with six counts of fraud and faces up to 20 years in prison.
Theranos, founded by Holmes in 2003, claimed it would revolutionise the medical testing space with the introduction of a new blood diagnostic technology that was capable of performing several tests on a small dose of blood. The medical start-up had reached a valuation of $10 billion. However, it was later found that the company’s claims were largely fabricated, with reports from the Wall Street Journal revealing that Theranos had been overstating the functions of its technology.
Holmes and her former partner and co-president Ramesh “Sunny” Balwani were accused by the US Department of Justice of defrauding both consumers who bought and used the blood tests and investors who believed the start-up would become profitable in the long term.
It is expected that Holmes will lean on a “Svengali defence”, arguing that her role in the Theranos scandal was heavily influenced by an allegedly abusive relationship with Balwani. However, lawyers for Balwani have labelled these allegations as outrageous. Holmes’ former partner will appear in court at a separate trial in February 2022.
The case is likely to take many weeks to resolve, with the court setting aside time into December for proceedings. Holmes has pleaded not guilty to all counts of wire fraud and conspiracy to commit wire fraud. If convicted, Holmes will face up to 20 years in prison.