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.
Authorities have identified the 16 people killed in a massive blast at a munitions factory in rural Tennessee.
They were killed in an explosion on Friday at an Accurate Energetic Systems facility around 60 miles southwest of Nashville. The company researches and supplies explosives for the military.
Investigators are still working to discover the cause of the explosion.
A satellite image showing the plant before the explosion, in April 2021. Pic: Vantor/Reuters
A satellite image showing the aftermath of the blast. Pic: Vantor/Reuters
Those killed were: Jason Adams, Erick Anderson, Billy Baker, Adam Boatman, Christopher Clark, Mindy Clifton, James Cook, Reyna Gillahan, LaTeisha Mays, Jeremy Moore, Melinda Rainey, Melissa Stanford, Trenton Stewart, Rachel Woodall, Steven Wright and Donald Yowell.
Reyna Gillahan. Pic: Facebook
Donald Yowell. Pic: Facebook
At a news conference, Humphreys County Sheriff Chris Davis said people in the community probably at least knew relatives of the victims killed in the explosion.
“It’s just small county, rural America, where everybody knows each other and everybody’s gonna take care of each other,” he said.
A candlelit vigil was held to honour the victims. Pic: AP
Authorities said there were no survivors of the blast, which left twisted and burning metal in its wake.
They said they were working to clear the area of hazards, including explosives, and identify remains.
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Once the area is clear they can begin investigating what caused the explosion, said Matthew Belew, acting special agent in charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives.
He said some of the relevant evidence was spread out over miles.
“It’s almost like putting a puzzle back together,” he added.
“We have worked closely with AES to look at pictures, look at blueprints, any of the identifying things that were in the building. And then we slowly methodically start to put some of that stuff together.”
US
Britain has been playing a role behind the scenes of Trump’s deal between Israel and Hamas | Beth Rigby
Sir Keir Starmer will join world leaders at a historic summit in Egypt today – to witness the signing of the Gaza peace plan to end two years of conflict, bloodshed and suffering that has cost tens of thousands of lives and turned Gaza into a wasteland.
Travelling over to Egypt, flanked by his national security adviser Jonathan Powell, the prime minister told me it was a “massive moment” and one that is genuinely historic.
US President Donald Trump moved decisively last week to end this bloody war, pushing Israeli Prime Minister Benjamin Netanyahu and Hamas into a ceasefire as part of his 20-point peace plan.
Pic: AP
In the flurry of the following 48 hours, Sir Keir and another 20 or so leaders were invited to Egypt to bear witness to the signing of this deal, with many of them deserving some credit for the effort they made to bring this deal around – not least the leaders of Qatar, Egypt and Turkey, who pressed Hamas to sign up to this deal.
Today, the remaining 20 living hostages are finally set to be released, along with the bodies of another 28 who were either killed or died in captivity, and aid is due to flow back into a starving Gaza.
Some 1,200 Israelis were killed on 7 October 2023, with another 250 taken hostage. In the subsequent war, most of Gaza’s two million population has been displaced. More than 67,000 Gazans have been killed, according to Palestinian health officials.
Then, the signing ceremony is due to take place this afternoon in Sharm el Sheikh. It will be a momentous moment after a long and bloody war.
But it is only just the beginning of a long process to rebuild Gaza and try to secure a lasting peace in the region.
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Humanitarian aid rolls into Gaza
The immediate focus for the UK and other nations will be to get aid into Gaza, with the UK committing £20m for water, sanitation and hygiene services for Gazans.
But the focus for the UK and other European allies is what happens after the hostages are released and Israel withdraws its troops.
What happens next is a much bigger and more complicated task: rebuilding Gaza; turning it into a terrorist-free zone; governing Gaza – the current plan is for a temporary apolitical committee; creating an international stabilisation force and all the tensions that could bring about – which troops each side would allow in; a commitment for Israel not to occupy or annex Gaza, even as Netanyahu makes plain his opposition to that plan.
The scale of the challenge is matched by the scale of devastation caused by this brutal war.
The prime minister will set out his ambition for the UK to play a leading role in the next phase of the peace plan.
Starmer arrives in Sharm el-Sheikh. Pic: PA
Back home, the UK is hosting a three-day conference on Gaza’s recovery and reconstruction.
Last week, France hosted European diplomats and key figures from Middle Eastern countries, Egypt, Jordan, Saudi Arabia and Qatar – and later this week, the German chancellor is hoping to organise a conference on the reconstruction of Gaza with the Egyptians.
But in reality, European leaders know the key to phase two remains the key to phase one, and that’s Donald Trump.
As one UK figure put it to me over the weekend: “There is lots of praise, rightly, for the US president, who got this over the line, but the big challenge for us post-war is implementing the plan. Clearly, Arab partners are concerned the US will lose focus.”
Bridget Phillipson and Mike Huckabee. Pics: Sky/AP
The prime minister knows this and has made a point, at every point, to praise Mr Trump.
His cabinet minister Bridget Phillipson learned that diplomatic lesson the hard way yesterday when she was publicly lambasted by the US ambassador to Israel Mike Huckabee for suggesting to my colleague Trevor Phillips that the UK “had played a key role behind the scenes” and failed to mention Mr Trump by name.
“I assure you she is delusional,” tweeted Governor Huckabee. “She can thank @realDonaldTrump anytime just to set the record straight”.
Today, leaders will rightly be praising Mr Trump for securing the breakthrough to stop the fighting and get the remaining hostages home.
People hug next in Hostages Square. Pic: Reuters
But this is only the beginning of a very long journey ahead to push through the rest of the 19-point plan and stop the region from falling back into conflict.
Britain has, I am told, been playing a role behind the scenes. The PM’s national security adviser Mr Powell was in Egypt last week and has been in daily touch with his US counterpart Steve Witkoff, according to government sources. Next week the King of Jordan will come to the UK.
Part of the UK’s task will be to get more involved, with the government and European partners keen to get further European representation on Trump’s temporary governance committee for Gaza, which Tony Blair (who was not recommended or endorsed by the UK) is on and Mr Trump will chair.
The committee will include other heads of states and members, including qualified Palestinians and international experts.
As for the former prime minister’s involvement, there hasn’t been an overt ringing endorsement from the UK government.
It’s helpful to have Mr Blair at the table because he can communicate back to the current government, but equally, as one diplomatic source put it to me: “While a lot of people in the Middle East acknowledge his experience, expertise and contact book, they don’t like him and we need – sooner rather than later – other names included that Gulf partners can get behind.”
Today it will be the US, Egypt, Qatar and Turkey that sign off on the peace plan they directly negotiated, as other Middle Eastern and European leaders, who have flown into Sharm el Sheikh to bear witness, look on.
But in the coming days and weeks, there will need to be a big international effort, led by Mr Trump, not just to secure the peace, but to keep it.
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