Elizabeth Holmes trial begins – the downfall of a Silicon Valley medical hero
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.
Holmes shared the stage with Bill Clinton and Alibaba co-founder Jack Ma
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.
Holmes has pleaded not guilty to the charges
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.
Theranos president Ramesh Balwani has also been charged with fraud – which he denies
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.
Holmes will be tried at a court in San Jose, California
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.
Jury selection has begun in the trial, which the court expects may continue into December.
America’s vaccine-sceptic health secretary has announced $500m (£375.8m) worth of cuts to their development in the country.
The US health department is cancelling contracts and pulling funding for jabs to fight viruses like COVID-19 and the flu, it was announced on Tuesday.
Robert F Kennedy Jr, known as RFK Jr, said 22 projects developing mRNA vaccines will be halted. It is the latest in a series of decisions to reduce US vaccine programmes.
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The health secretary has fired the panel that makes vaccine recommendations, reduced recommendations for COVID-19 shots, and refused to endorse vaccines despite a worsening measles outbreak.
RFK Jr claims the US will now prioritise “safer, broader vaccine strategies, like whole-virus vaccines and novel platforms that don’t collapse when viruses mutate”.
Responding to the announcement of cuts, Mike Osterholm, a University of Minnesota expert on infectious diseases and pandemic preparations, said: “I don’t think I’ve seen a more dangerous decision in public health in my 50 years in the business.”
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Dr Paul Offit, a vaccine expert at Children’s Hospital of Philadelphia, said RFK Jr’s move was short-sighted and that mRNA vaccines “certainly saved millions of lives”, including during the pandemic.
MRNA vaccines work by delivering a snippet of genetic code into the body that triggers an immune response, rather than introducing a real version of the virus.
According to the UK Health Security Agency, the “leading advantage of mRNA vaccines is that they can be designed and produced more quickly than traditional vaccines”.
Moderna, which was studying a combo mRNA shot that can tackle COVID and flu for the US health department, previously said it believed mRNA could speed up production of flu jabs compared with traditional vaccines.
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A COVID-19 vaccine during the pandemic. File pic: PA
Scientists are also exploring how mRNA could be used in cancer immunotherapies and in other illnesses.
At the White House earlier this year, billionaire tech entrepreneur Larry Ellison praised mRNA for its potential to treat cancer.
RFK Jr touts ‘effective’ alternative
The health department said the abandoned mRNA projects signal a “shift in vaccine development priorities.”
“Let me be absolutely clear, HHS supports safe, effective vaccines for every American who wants them,” Mr Kennedy said in a statement.
Later, he said work is underway on an alternative – a “universal vaccine” that mimics “natural immunity”.
“It could be effective – we believe it’s going to be effective – against not only coronaviruses, but also flu,” he said.
The US House Oversight Committee has issued subpoenas for depositions with former president Bill Clinton and former secretary of state Hillary Clinton relating to the sex trafficking investigation into Jeffrey Epstein.
The Republican-controlled committee also subpoenaed the Justice Department for files relating to the paedophile financier, as well as eight former top law enforcement officials.
Donald Trump has denied prior knowledge of Epstein‘s crimes, claiming he ended their relationship a long time ago.
Mr Trump and Mr Epstein at a party together in 1992. Pic: NBC News
The US president has repeatedly tried to draw a line under the Justice Department’s decision not to release a full accounting of the investigation, but politicians from both major political parties, as well as many in Mr Trump’s political base, have refused to drop their interest in the Epstein files.
Epstein died in a New York jail cell in 2019 awaiting trial on sex trafficking charges, and since then, conspiracy theories have swirled about what information investigators gathered on him and who else may have been involved in his crimes.
Republicans on the House Oversight Committee initiated the subpoenas for the Clintons last month, as well as demanding all communications between former president Joe Biden’s Democrat administration and the Justice Department about Epstein.
The committee previously issued a subpoena for an interview with Epstein’s former girlfriend, Ghislaine Maxwell, who had been serving a prison sentence in Florida for luring teenage girls to be sexually abused by Epstein. She was recently transferred to another facility in Texas.
Mr Clinton was among those acquainted with Epstein before the criminal investigation against him in Florida became public two decades ago. He has never been accused of wrongdoing by any of the women who say Epstein abused them.
Mr Clinton previously said, through a spokesperson, that while he travelled on Epstein’s jet, he never visited his homes and had no knowledge of his crimes.
Read more:
All we know about Trump and Epstein’s ‘friendship’
The subpoenas give the Justice Department until 19 August to hand over the requested records.
The committee is also asking the former officials to appear for depositions throughout August, September and October, concluding with Hillary Clinton on 9 October and Bill Clinton on 14 October.
Although several former presidents, including Mr Trump, have been issued congressional subpoenas, none has ever appeared before members under compulsion.
Last month, Mr Trump instructed Attorney General Pam Bondi to release information presented to the grand jury that indicted Maxwell for helping Epstein sexually abuse teenage girls.
Sean “Diddy” Combs has been in contact with Donald Trump about a pardon, a source close to the rapper’s legal team has told Sky News’ US partner network NBC News.
A White House spokesperson said it “will not comment on the existence or nonexistence of any clemency request”.
On Tuesday, the rapper was denied bail ahead of his sentencing in October, when he could face up to 20 years in prison after he was convicted of prostitution-related offences.
The sentence will likely be much shorter than that, however.
In July, he was found guilty of two counts of transportation for prostitution – but cleared of more serious charges of racketeering conspiracy and sex-trafficking, which carried potential life sentences.
During an interview with news channel Newsmax last Friday, Mr Trump said “they have talked to me about Sean” but did not announce any decision.
Read more:
How the trial unfolded
The rise and fall of Sean ‘Diddy’ Combs
Combs reacts after the verdicts are read out in court. File pic: Reuters
The president seemed to cast doubt that he would grant a pardon, however.
“You know, I was very friendly with him. I got along with him great. And seemed like a nice guy, I didn’t know him well,” Trump said. “But when I ran for office, he was very hostile.”
“I don’t know,” Trump said. “It makes it more – I’m being honest, it makes it more difficult to do.”
Trump was then asked, “more likely a ‘no’ for Combs?”
Trump responded: “I would say so.”
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How the Diddy trial unfolded
Combs, who co-founded Bad Boy Records and launched the career of the late Notorious BIG, was for decades a huge figure in pop culture, as well as a Grammy-winning hip-hop artist and business entrepreneur, who presided over an empire ranging from fashion to reality TV.
Now, as well as the criminal conviction, he is also facing several civil lawsuits.
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