In a surprise move, Theranos founder Elizabeth Holmes took the stand in her own defense on Friday during a fraud trial that has held Silicon Valley in its grip.
The former CEO of the blood-testing company is charged with deceiving investors and customers about a supposedly revolutionary device that could perform hundreds of tests using just a drop of blood. She faces 11 counts of fraud and up to 20 years in prison.
Holmes’s testimony came just hours after prosecutors rested their case, as the trial approached the end of its 11th week. The unexpected decision to have Holmes testify so early in her defense was a bombshell development and a risky move by her legal team.
Holmes walked slowly to the stand before a rapt courtroom filled with spectators and jurors, all wearing masks. She began her testimony by recounting her early years as a student at Stanford University and her interest in disease detection, culminating in her decision to drop out of school at age 19 and found the startup later known as Theranos.
She recounted her early years as a student and interest in disease detection while working with a respected chemistry professor, Channing Robertson, who would later join Theranos.
“He encouraged me to continue my research,” Holmes recalled. She spoke in a husky voice that became one of her trademarks as she raised hundreds of millions of dollars and touted the revolutionary potential of Theranos’s blood testing technology.
After drawing up a business plan and securing patents for the blood-testing technology she was trying to perfect, Holmes testified that she used savings earmarked for college to finance her ambitions of shaking up the health care industry.
“I started working all the time ... trying to meet people who could help me build this,” Holmes said.
Holmes also discussed how the company had originally been called Real Time Cures but later changed its name. “I was doing it on my own … I raised the money to start a lab and hire scientists,” she told the court.
Taking the stand in her defense carries significant risks as prosecutors can attack on any inconsistencies in Holmes’s numerous public statements. Federal prosecutors made it clear that they are eager to grill Holmes under oath as they presented their case against her. It’s unlikely they will get that opportunity until Monday, at the earliest, when the trial resumes.
Over the course of the trial, being held in the San Jose, California, courtroom, government attorneys have attempted to prove Holmes knowingly misled investors and patients by misrepresenting the capabilities of her company’s blood-testing devices. At the close of their case, the defense moved to dismiss one count of fraud regarding a patient who was unwilling to testify.
The prosecution called more than two dozen witnesses including former employees, investors and patients who testified that Theranos’s blood-testing devices did not work as advertised, returning inaccurate results. Witnesses also stated many blood tests were being carried out by external labs rather than on Theranos devices.
The legal team for Elizabeth Holmes will argue the founder did not knowingly commit fraud but rather did not understand the shortcomings of Theranos technology.
In opening arguments, her defense attorney Lance Wade painted a picture of a hardworking young female executive caught up in the Silicon Valley culture that encourages entrepreneurs to push cutting-edge ideas.
“In the end, Theranos failed, and Ms Holmes walked away with nothing,” he said. “But failure is not a crime – trying your hardest and coming up short, is not a crime.”
The defense is expected to argue that Holmes was influenced by her co-executive and former boyfriend, Sunny Balwani. As potential witnesses, the defense team has listed a number of domestic violence experts, suggesting they may argue Holmes was abused and not thinking clearly when she made business decisions that resulted in fraud.
“There was another side of Holmes’s relationship with Balwani that the public never saw,” Wade said in opening arguments, adding that “trusting [Balwani] as her primary adviser was one of her mistakes”.
Balwani has strongly denied these allegations. His defense team did not respond to request for comment. He faces his own trial for fraud charges in 2022.
The Associated Press contributed to this report.
