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.
The family of the man accused of throwing petrol bombs at a pro-Israel group in Colorado have been taken into custody.
Immigration officers detained Mohamed Soliman’s relatives, believed to be his wife and five children.
Soliman, an Egyptian national, moved to the US three years ago and lived in Colorado Springs but was there illegally after his visa and work authorisation expired. He reportedly has two teenage children and three younger children.
“We are investigating to what extent his family knew about this heinous attack, if they had knowledge of it, or if they provided support to it,” said homeland security secretary Kristi Noem on X.
Soliman, 45, is being held after Molotov cocktails were thrown at a group doing a walk for Israeli hostages in Boulder on Sunday.
The attacker allegedly yelled “Free Palestine” and had a total of 18 petrol bombs – but police said he “got scared” and only tossed a couple.
Soliman also had a makeshift flamethrower in the form of gas in a backpack sprayer, according to a FBI statement, but told investigators he did not use it.
Twelve people were injured, authorities said. The victims were aged between 52 and 88 and three of them were still being treated in hospital on Tuesday.
Mohamed Soliman appeared with a bandaged ear in a mugshot. Pic: Boulder Police Dept.
Soliman was allegedly dressed as a gardener to get as close as he could to the small group. Authorities said he told them he had no regrets.
He has been charged with a hate crime and 16 counts of attempted murder in federal and state cases.
Court papers said he planned the attack for a year and told authorities that no one, including his family, was aware of the plot.
Video showed Soliman being arrested at the scene and an apparent burn mark on the ground
An FBI statement said Soliman left an iPhone hidden in a drawer at his home with messages for his family but that his wife handed it to police.
The family are said to be cooperating with investigators.
Soliman admitted taking gun training to try to get a permit but was denied as he wasn’t a US citizen, according to police and the FBI.
Barred from buying a firearm, he allegedly used YouTube to learn how to make petrol bombs.
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Law enforcement searched for bombs after the attack. Pic: AP
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Israeli Prime Minister Benjamin Netanyahu said the Boulder attack was “aimed against peaceful people who wished to express their solidarity with the hostages held by Hamas, simply because they were Jews”.
The incident follows the arrest of a Chicago-born man in the fatal shooting of two Israeli embassy employees in Washington DC last month.
Tensions are simmering in the US over Israel’s war in Gaza.
There has been an increase in antisemitic hate crime, as well as moves by some supporters of Israel to brand pro-Palestinian protests as antisemitic.
Elon Musk has criticised US President Donald Trump’s tax and spending bill, calling it “outrageous” and a “disgusting abomination”.
The bill, which includes multi-trillion-dollar tax breaks, was passed by the House Republicans in May, and has been described by the president as a “big, beautiful bill”.
The tech billionaire hit out at the tax cuts on his platform X, writing: “I’m sorry, but I just can’t stand it anymore.
“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.
“Shame on those who voted for it: you know you did wrong. You know it.”
Elon Musk left his ‘special government employee’ role last week. Pic: AP.
In American politics, “pork” is a political metaphor used when government spending is allocated to local projects, usually to benefit politicians’ constituencies.
Musk left the administration abruptly last week after working to cut costs with his team, the newly formed Department of Government Efficiency – known as DOGE – with the ambition of sacking federal workers and cutting red tape.
The White House brushed Musk’s comments aside, claiming they did not surprise the president.
In a press conference on Tuesday, press secretary Karoline Leavitt said that “the president already knows where Elon Musk stood on this bill”.
She added: “This is one, big, beautiful bill.
“And he’s sticking to it.”
The White House on Tuesday asked Congress to cut back $9.4bn in already approved spending, taking money away from DOGE.
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What did Musk achieve at DOGE?
The billionaire tweeted: “It will massively increase the already gigantic budget deficit to $2.5 trillion (!!!!) and burden American citizens with crushingly unsustainable debt.”
He also suggested voting out politicians who advanced the president’s tax bill.
“In November next year, we fire all politicians who betrayed the American people,” Musk wrote in another X post.
How Musk’s mission to cut government spending fell flat
Last Thursday, Musk revealed on X that his scheduled time as a “special government employee” was coming to an end.
Before the news broke, Musk’s father told Sky News his son was “not a very good politician”.
But speaking to Gillian Joseph on The World, Errol Musk insisted there was “no rift between Elon and Donald Trump”.
Musk’s time at DOGE was controversial, with drastic cuts to America’s humanitarian efforts sparking particular criticism.
Questions have also been raised about whether the department has actually saved taxpayers as much money as suggested.
Musk initially had ambitions to slash government spending by $2trn (£1.5trn) – but this was dramatically reduced to $1trn (£750bn) and then to just $150bn (£111bn).
Elon Musk brought his son X Æ A-12 to the Oval Office during a press conference earlier this year. Pic: Reuters.
The 53-year-old, who famously brought his son X Æ A-12 to the Oval Office, also expressed frustration about resistance to his ideas and clashed with other senior members of the Trump administration.
He recently told The Washington Post: “The federal bureaucracy situation is much worse than I realised. I thought there were problems, but it sure is an uphill battle trying to improve things in DC to say the least.”
By law, status as a “special government employee” means he could only serve for a maximum of 130 days, which would have ended around 30 May.
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