Elizabeth Holmes, the founder and CEO of Theranos, was guilty of misleading investors. Theranos planned to revolutionize blood testing by developing a device that could run hundreds of medical tests on just a few drops of blood. At one point, the company became a huge sensation and valued at more than $9 billion.
However, in 2015 The Wall Street Journal exposed major problems with the Theranos’ tech. Federal investigators also found that the company puts patient safety at risk. This led to the company’s labs closing in 2016.
A federal court charged Holmes and her former partner, Theranos president Balwani with wire fraud and conspiracy. This became one of the major scams to hit Silicon Valley that year. The court argued that Holmes and Balwani deliberately misled investors and the public about the reliability of Theranos’ technology.
Due to the Covid-19 pandemic and Holmes’s pregnancy, the trial was delayed for months. During her testimony, Holmes said she didn’t try to mislead investors about Theranos’s blood testing program. To defend herself, she directed blame to others at the company. She even went as far as insinuating that investors had just misinterpreted some of her statements.
Elizabeth Holmes finally charged
Her lies finally caught up to her when the jury heard recordings and videos of her lying about what types of blood tests the company could do. She even admitted to adding logos from pharmaceutical companies to their lab reports without those companies’ authorization or knowledge.
The jury charged Holmes with three counts of wire fraud, and she now faces up to 20 years in prison for each count. Balwani will also face charges during his fraud trial in February. This has become a precautionary tale for investors as they lost up to $945M.