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Elizabeth Holmes: When Can We Expect a Verdict in the Theranos Trial?

Elizabeth Holmes: When Can We Expect a Verdict in the Theranos Trial?
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The jury in Theranos Inc criminal fraud trial, Elizabeth Holmes, said Monday it was unable to reach a unanimous verdict on three of the 11 charges. The jury is now on the seventh day of its deliberations.

When do we expect the verdict in the trial of Elizabeth Holmes?

The defense was based on December 8, 2021, in the trial of Ms. Holmes, founder of Theranos, a startup that has promised to revolutionize the blood testing industry. Ms. Holmes is accused of defrauding patients and investors. Closing arguments took place on December 16 and December 17. The jury delivered the case on December 17 and began deliberating in earnest the following Monday. On January 3, 2022, the seventh day of deliberations, the jury informed the judge that they were unable to reach a unanimous verdict on three of the 11 charges. The judge gave them further instructions to continue deliberating, telling them, “Take the time you need to discuss things. There is no hurry. of our order.” The instructions also urged them not to change their beliefs solely because of the opinions of their fellow jurors.

What was the main issue raised by the defense?

The defense placed a large and potentially risky bet by putting Mrs. Holmes on the podium to testify over the course of seven days.

Through it all, she told her story in a clear, confident voice that followers of Theranos might remember from the company’s heyday. Mrs. Holmes seldom falters while being questioned by her attorney or the government, answering briefly and making eye contact with the questioner, and only occasionally speaking directly to the jury. She was smiling a lot and laughing a little. Her composure only exploded when she broke down in tears while testifying about what she described as an abusive personal affair with her vice-president in Theranos, Ramesh “Sunny” Balwani.

Mrs. Holmes regretted some business decisions and admitted mistakes, but she also sought to blame a long list of people: Mr. Balwani; laboratory managers, staff scientists; and its marketing agency. The defense approached the trial through several pillars.

The first pillar is that her knowledge of the company came from her employees she trusts. She said the reports she received from subordinates led her to believe that the company’s technology elements were working successfully.

Second, Ms Holmes targeted what lawyers after the trial saw as the prosecution’s strongest evidence: Theranos documents that had been altered to include the names and logos of drug companies, including Pfizer Inc. , which incorrectly indicates that companies have validated Theranos technology. Ms Holmes has admitted manipulating the reports but said it was not done maliciously.

Third, Ms Holmes said Theranos started using commercial blood analyzers because the company couldn’t handle a large volume of patients’ blood samples on its own devices, and not because the company was trying to mislead anyone.

Fourth, Ms Holmes lamented how Theranos handled complaints from lab staff, and said she wished she had handled business decisions differently, moments that made her seem more relatable, legal observers said.

Fifthly, Ms. Holmes claimed that Mr. Balwani was emotionally and sexually abused. She described a relationship in which she was forced to have sex against her will and spent more than a decade trying to live up to his strict standards at the expense of her friends, family, and personal agency.

At Elizabeth Holmes’ trial, prosecutors displayed texts, emails and audio clips depicting her in her own words. WSJ’s Shelby Holiday asked Sarah Randazzo about the main pieces of evidence and what to expect. Photo: Nick Otto/AFP via Getty Images

What is the main issue raised by the prosecution?

During the 11 weeks of testimony, prosecutors provided an account of a CEO who repeatedly fabricated the successes of her technology while building a blood-testing company that ultimately failed. They now have to hope to convince jurors to elevate her behavior to the level of criminal fraud, which requires proof of intent.

The case included testimony from investors, former employees, scientists and a retired four-star general. It featured information that had not been captured by the extensive media coverage of Theranos: forged documents, a previously unknown lab manager who had never visited the lab, exaggerated revenue expectations for investors, and audio clips from a recording of a call Ms. Holmes was promoting the company to investors.

Investors told the story of how they were persuaded to back Theranos by claims of financial and technological success that turned out to be untrue. Previous employees witnessed how Ms. Holmes and her deputies rejected their efforts to raise alarms about the inaccuracy of Theranos’ tests and to prevent the company from using its devices on patients. Patients testified about receiving blood test results from Theranos that incorrectly led them to believe they had serious health conditions.

What are the charges facing Mrs. Holmes?

Ms. Holmes faces 11 counts of fraud and conspiracy to commit internet fraud, which are widely accused of deliberately defrauding patients and investors about Theranos’ abilities to raise hundreds of millions of dollars in capital and to get patients to come through the door of Theranos’ blood-testing centers.

What possible prison time would Mrs. Holmes face?

Each of the 11 counts carries a maximum prison sentence of 20 years. Sentencing is complex, and judges have discretion within guidelines to decide what punishment they think is appropriate.

Write to Sara Randazzo at sara.randazzo@wsj.com, Heather Somerville at heather.somerville@wsj.com and Anthony DeRosa at anthony.derosa@wsj.com

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