Elizabeth Holmes trial begins – the downfall of a Silicon Valley medical hero

Published

3 years ago

September 1, 2021

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The trial of Elizabeth Holmes, founder and former chief executive of medical technology company Theranos, has begun in California.

She is pleading not guilty to perpetrating one of the biggest frauds in Silicon Valley history, “an elaborate, years-long fraud” as the US government alleges, and faces up to 20 years in prison.

Theranos itself, which she founded aged 19, has shut down after the unravelling of its claims to have invented a revolutionary finger-prick blood test.

Holmes is accused of knowing this test was unreliable and inaccurate and of hiding this information.

The Downfall

By 2014 the company had announced a partnership with US pharmacy chain Walgreens, and Forbes was hailing Elizabeth Holmes as the world’s youngest self-made female billionaire.

Theranos reached its peak in September 2015 when the company was valued at $9bn (£7bn) and Holmes shared a stage with former president Bill Clinton and Chinese entrepreneur Jack Ma in a panel discussion about equality and opportunity.

But a month later, the Wall Street Journal published a front-page story that claimed the company’s blood testing technology was so flawed Theranos was actually using equipment made by other businesses to carry out tests in its laboratories.

The Journal reported that the company’s former chief scientist had taken his own life two years earlier after telling his wife the finger-prick technology did not work.

The Charges

Investigations by medical and financial regulators soon followed and in 2018 criminal charges were filed against Elizabeth Holmes and Romesh Balwani, her former boyfriend and the president and chief operating officer of Theranos, accusing them of fraud.

The pair were charged with engaging “in a multi-million-dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients” and each face two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

Theranos made misrepresentations to doctors and patients about the reliability of its tests, the Department of Justice alleged.

The executives were also accused of making misrepresentations to investors about the financial condition of the company, celebrating expected sales of over $1bn when they were actually bringing in just a few hundred thousand.

The Trial

Lawyers for Holmes are expected to argue that she was working with an impaired mental state at the time of the fraud due to alleged sexual abuse and coercive behaviour by Ramesh Balwani.

Balwani’s lawyers have denied these claims.

His trial is set to take place next year after his lawyers sought to have him tried separately to avoid Holmes’ testimony prejudicing the jury. He too has pleaded not guilty.

According to an unsealed court document written by Balwani’s lawyers when seeking to have his case heard separately, she “plans to introduce evidence that Mr Balwani verbally disparaged her and withdrew ‘affection if she displeased him’; controlled what she ate, how she dressed, how much money she could spend, [and] who she could interact with”.

The jury selection process has been a challenge, with dozens already removed after confirming their familiarity with media coverage of the case, and with others now asked whether they have any experience of abusive relationships.

The main defence expected from Holmes’ lawyers is that Balwani’s controlling behaviour “erased her capacity to make decisions”, including in the case of knowingly defrauding investors, doctors and patients.

What does it mean?

Both defendants previously reached a settlement with the Securities and Exchange Commission, relinquishing their shares in the company and paying a $500,000 (£360,000) penalty.

But their case is also emblematic of what is often seen as a culture of ‘fake-it-until-you-make-it’ among Silicon Valley startups, as Sky News business presenter Ian King writes.

Analysis by Ian King, business presenter

There are many lessons to be drawn from the Theranos affair, but perhaps the most worrying thing that has emerged is the culture of secrecy that existed in Theranos, a culture that was – and is – by no means unique in Silicon Valley.

John Carreyrou, the investigative journalist at the Journal whose stories exposed the scandal, has since written a book on the saga, Bad Blood, which highlights the weirdly cultish nature of the company.

Again, in this regard, Theranos was perhaps not so different from a number of other companies in the Valley.

Quite apart from the crushing losses for investors, this secrecy and cult-like nature had other real-world consequences, with many patients likely to have received erroneous blood test results.

There are many outstanding questions surrounding Theranos, not least the outcome of Ms Holmes and Mr Balwani’s forthcoming fraud trial, as well as whether the remaining patents being acquired by Fortress will turn out to have any lasting value.

The biggest of all, though, is whether there are other tech companies presently enjoying outlandish valuations that eventually turn out to be similarly flawed.

The chances must be that there are.

Jury selection has begun in the trial, which the court expects may continue into December.

US

Cardi B ‘wasn’t going to vote’ until Harris entered race – as National Guard activated in US state ‘in case of election violence’

Published

15 hours ago

November 2, 2024

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Cardi B 'wasn't going to vote' until Harris entered race - as National Guard activated in US state 'in case of election violence'

Cardi B has said she was not planning to vote in the US election this year, but Kamala Harris taking over as the Democratic nominee changed her mind.

The WAP rapper appeared at a Harris campaign rally on Friday, becoming the latest celebrity to endorse the vice president for Tuesday’s election following the likes of Beyonce, Jennifer Lopez, Bruce Springsteen and Eminem.

At the rally in Milwaukee in the swing state of Wisconsin, the singer said she would be voting for the Democratic nominee because she is “not delusional”, while branding Republican contender Donald Trump a “bully”.

Follow latest US election updates

“She’s passionate, compassionate… and most of all she is not delusional,” Cardi B said about the vice president, who took over as the Democratic presidential candidate after US President Joe Biden dropped out.

Cardi B went on to refer to Mr Trump as a “bully” and said about the Republican presidential candidate: “He said he’s gonna protect women whether they like it or not.

“If his definition of protection is not the freedom of choice… then I don’t want it,” she said.

“I’m not giving Donald Trump a second chance.”

Both Mr Trump and Ms Harris have been making the most of their last few days of campaigning, visiting swing states in a bid to get voters on their side in what is set to be a nail-bitingly close race.

The Republican nominee spent his day in Michigan and Wisconsin – calling on voters to “make America great again” by voting him in.

Mr Trump is currently being investigated by Arizona’s top prosecutor over comments he made about Liz Cheney, one of his most vocal Republican critics, when he said on Thursday she would not be a “radical war hawk” if she was in a war herself and had guns “trained on her face”.

“Let’s put her with a rifle standing there with nine barrels shooting at her, OK? Let’s see how she feels about it. You know, when the guns are trained on her face,” Mr Trump said during an event with former Fox News host Tucker Carlson.

The suburbs of Atlanta could tell us a lot about where the US election is going

In the suburbs of Atlanta, Georgia, there’s a hugely tight race afoot that could tell us a lot about where this election goes.

As I walk through the leafy streets of Cobb County, I see the signs of change everywhere.

This suburb is home to an exodus from Atlanta – one that’s brought more diversity, more affluence and more nuance.

Four years ago, it delivered a rare win for Joe Biden in a southern state that hadn’t backed a Democrat for president in nearly 30 years.

Georgia turned out to be the biggest swing for the party in 2020. Now, Kamala Harris wants to hold on to that momentum, but it won’t be easy.

Some cast suburbia as staid, sleepy and slow.

Keep reading here.

During his rally in Michigan last night, Mr Trump also engaged in an exchange with a heckler who shouted something unintelligible, before he stopped speaking and said: “You want to marry me?”

“She wants to marry me what the hell?”

That was met by a whooping before Mr Trump said: “Let me ask the [former] first lady if that would be ok… it’s OK with me but let me get permission”.

Meanwhile in Washington, the state governor has said he is “activating” members of the National Guard to be on standby in case of violence surrounding the upcoming election.

Governor Jay Inslee said he made the decision after he received information and concerns regarding potential violence.

The order is set to go into effect Monday and last until midnight on Thursday.

Ms Harris is expected to defeat Mr Trump in the state.

Ballot boxes were set on fire there earlier in the week, with hundreds of votes thought to have been damaged.

US

America does exit polls differently to the UK – here’s how and why

Published

20 hours ago

November 2, 2024

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America does exit polls differently to the UK - here's how and why

There are two main differences between election coverage in the UK and the United States.

Last July, at 10pm, Sky News’ exit poll graphic predicted a Labour landslide and a massive defeat for the Conservatives.

Confirmation of this forecast was a long time coming since constituency results are only announced by local returning officers once all votes have been counted.

US election latest: Data reveals potentially decisive trends in two swing states

Americans do things differently and for good reason. Polling stations close much earlier in the east than they do in the west. When voting has hours to go in some states, they’ve already started counting elsewhere.

There is a “wait for it” moment when voting closes in west coast states and the broadcasters can reveal the national exit poll headline, but this won’t tell us the winner.

Instead, it will tell us the types of people who have voted for Harris or Trump and the issues that dominated the outcome.

So far, one-nil to the UK, I think. But, here comes the next bit.

Instead of postponing announcements about votes until every last one has been accounted for, each state then begins releasing figures as and when votes are being counted.

And they do so in such a way where we can compare this time with previously. Not for them declarations in sports halls with dodgy microphones but rather running tallies for precincts (think our local council wards) and counties (ranging from tiny to huge).

It’s these data that US broadcasters such as NBC will use to “call” each state’s vote for president. The television networks are big players in the US election drama.

Over 160 million votes will be cast in the election, more than five times the number cast in our general election last July.

And while the outcome of our election was in no doubt once the broadcasters’ exit poll revealed Labour had won a landslide majority, that will be far from the case in the battle for the presidency.

As in the UK, a consortium of US broadcasters, comprising NBC, ABC, CBS and CNN, form the national election pool.

This commissions the consumer research company, Edison Research, to survey voters in over 600 polling places as people exit their polling station.

The survey also includes telephone interviews with people casting a ballot before 5 November. Once completed, the US exit poll will have obtained responses from over 20,000 voters, a similar number that were collected for the general election.

Two surveys of voters, therefore, but now important differences in their purpose become clear.

The UK version is entirely focussed on predicting the distribution of seats among the competing parties and, thereby, the winner and its likely House of Commons majority. Over recent elections it has proved pretty good at achieving this task.

By contrast, the US version is much less concerned about predicting the winner (and there are very good reasons for taking this approach) and more interested in the campaign issues that mattered to voters, how they viewed the candidates and what factors motivated them to make their choices.

The survey identifies key demographic characteristics for each respondent – men or women, age, ethnic heritage, and educational qualifications.

Combined with questions relating to their choice for president this time around, their usual partisan preference, Democrat, Republican or none of the above, the survey data enables a considered and detailed analysis of what kinds of voters made what kinds of choices and their reasons for doing so.

Broadcast organisations, including Sky News, will use the 2024 exit poll to highlight differences between men and women voters in relation to the abortion issue.

The poll will also show how the economy ranked among voters and whether Donald Trump’s stance on low taxation gained or lost him votes among different social groups. Did Kamala Harris’s association with the Biden administration and the challenges of illegal immigration prove to be a positive or a negative in her bid for the White House?

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All very interesting, but aren’t we all tuning in to see who’s won? While the US exit poll can, in theory, be used for this purpose it is unwise to do so in what is proving to be an extremely close race.

Sky’s tracker of national polls shows the Democrat blue line and the Republican red line moving ever closer together but with Harris currently marginally ahead. But even if she loses the national vote, the polls would still be within the margin of error.

Of course, she could yet win more votes than Trump and still lose the election, as Hillary Clinton discovered when she lost to him in 2016. Winning votes is necessary, but it’s where those votes are and the available number of electoral college votes that matters the most.

Trump beat Clinton because his votes were better distributed than hers. History could be repeated.

Releasing precinct-level voting numbers as counting progresses is essential to US election coverage. The national election pool employs over a thousand researchers to collect votes from each of the 50 states.

Additionally, NBC News will augment these figures with more detailed analysis prior to making its call for each state and the electoral college votes for Harris or Trump. The first to reach 270 college votes wins.

Professor John Lapinsky of Pennsylvania University leads NBC’s decision desk.

Although the broadcasters have pooled resources to bring us the exit poll, each will independently analyse the actual voting figures as they become available.

Lapinsky and his team on behalf of NBC will call the state for either Harris or Trump only when they are satisfied that the leading candidate’s vote is sufficiently large that he or she cannot be overtaken.

This a big moment for each broadcaster, especially when the race is likely to be close and where social media may be playing a significant role in stoking accusations and counter-accusations of a fraudulent election.

With so much at stake, these decisions will take time and patience.

Our July election was done and dusted in time for the breakfast bulletins. It could be days of counting, recounting and legal appeals before we know the winner of the 2024 presidential election.

US

US election: The elderly couple whose marriage has been tested by Trump

Published

2 days ago

November 1, 2024

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US election: The elderly couple whose marriage has been tested by Trump

When they made America truly great its backbone was forged in Bethlehem, Pennsylvania.

The steel for 80% of Manhattan’s skyscrapers, many of the US Navy’s battleships, and even the entire San Francisco Golden Gate Bridge, all came from its blast furnaces in the hills north of Philadelphia.

Its mammoth steel plants stretched for almost five miles.

They lie empty and unused, now a huge open-air museum for guided tours led by former plant workers like Don Young.

US election latest: ‘We’re gonna have to lock them up,’ Trump says after suing CBS for $10bn

The 87-year-old has been married to Barbara for 20 years, but their marriage has been tested in recent months, as have many others in the most divisive presidential election in living memory.

Both Republicans, she is for Donald Trump, he is emphatically not.

Mr Trump, I pointed out, claimed he could make America great again. Did he believe him?

“No, I do not believe him. My wife does,” he said. “I’ve seen the rise of dictators in history.

“As much as I am a studier of the history of industry, I’m also a studier of the history of politics and world politics. And, you know, Mr Trump’s campaign literally, literally mirrors that of Adolf Hitler.”

His wife sees Mr Trump completely differently: “I absolutely do not agree with that. And I’m sorry to hear my husband say this. And I actually believe we have seen what President Trump can do and how our country was when he was in office.”

Trump ‘is the future for America’, Ms Young says

Their town has recovered from the collapse of Bethlehem Steel. But it’s the state of America that worries Ms Young now.

And it is Mr Trump who can save it, she said.

“He is the future for America,” she said. “I don’t want to see people coming over our border. We’ve had women murdered and raped by illegal immigrants. Who wants their children dead as a result of fentanyl, which comes over the border?”

Trump is ‘going to run America into the ground’

Her husband’s view is diametrically opposed.

“I think he’s going to run America into the ground because he does not observe any of the Democratic norms that his predecessors have,” he said.

“He didn’t observe them when he was in office. And so that’s just a window on what will happen in this coming term.”

Pennsylvania will likely determine presidential election result

Their marriage mirrors the state of play in the place they live in.

Pennsylvania is on a knife edge, say the polls, split right down the middle and the outcome here will likely determine the result on election day in this most important of swing states.

They can agree on one thing. They cannot wait for this election to be over.

Mr Young said their marriage can survive a Trump victory. Ms Young thinks so too.

The closest, nastiest, most divisive presidential election in living memory will be over soon. The bitterness and division that has plagued it less so in this deeply polarised country.