Elizabeth Holmes, founder and chief executive of Theranos, has been found guilty on four of 11 charges of fraud, concluding a high-profile trial that captivated Silicon Valley and chronicled the missteps of the now-defunct blood-testing start-up, say reports. Theranos, a health technology company, had soared in valuation after the company claimed to have revolutionised blood testing by developing testing methods that could use surprisingly small volumes of blood, such as from a fingerprick.
“Prosecutors said Ms Holmes knowingly lied about technology that she said could detect diseases with a few drops of blood. Jurors found Ms Holmes guilty of four charges, including conspiracy to commit fraud against investors and three counts of wire fraud. She faced 11 charges in total and was found not guilty of four charges relating to defrauding the public. The split verdict came after the judge said the jury, having deliberated for seven days, could deliver a partial verdict after being unable to reach consensus on another three counts,” says a report from BBC News
The jury returned no verdict on three counts of wire fraud and a not guilty verdict on three additional counts of wire fraud and one of conspiracy to commit wire fraud. The three no verdict counts will be retried in a new case.
According to a report from Wall Street Journal (WSJ)
, the guilty verdicts against Ms Holmes mean the Theranos founder could be going to prison for years. “Sentencing is a complex and time-consuming process, and many steps still stand between Ms Holmes and any potential prison time. She likely will be allowed to stay free on bail until her sentencing, which could take place six months or more from now,” sentencing experts said.
The verdict seals Ms Holmes’ extraordinary rise and fall and could have wide-ranging consequences for the tech industry, a report from the Guadian says
, adding, “It also marked an indictment of the hype machine that helped rocket Holmes to fame, as she graced the covers of major magazines, headlined conferences, and drew comparisons to Apple’s Steve Jobs.”
According to a CNN Business report
, the charges Ms Holmes was found guilty of include one count of conspiracy to defraud investors, as well as three wire fraud counts tied to specific investors. She faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count, the report says.
By 2015, Forbes had named Ms Holmes the youngest and wealthiest self-made female billionaire in America based on a $9-billion valuation of her company.
Following revelations of potential fraud about Theranos’s claims, the next year, Forbes revised its estimate of Holmes’s net worth to zero, and Fortune named her in its feature article on “The World’s 19 Most Disappointing Leaders.”
The decline of Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company’s technology claims and whether Ms Holmes had misled investors and the government. In 2018, the US Securities and Exchange Commission (SEC) charged Theranos and Ms Holmes with deceiving investors by ‘massive fraud’ through false or exaggerated claims about the company’s blood-testing technology accuracy.
Ms Holmes settled the charges by paying a $500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control of Theranos, and being barred from serving as an officer or director of a public company for 10 years.
In June 2018, a federal grand jury indicted Ms Holmes and Theranos’ former chief operating officer (COO) Ramesh Balwani on nine counts of wire fraud and two counts of conspiracy to commit wire fraud for distributing blood tests with falsified results to consumers. The recent trial in the case, began on 31 August 2021 and in January this year, Ms Holmes was convicted of four counts of fraud and conspiracy.
Ms Holmes’s career, the rise and dissolution of her company, and the subsequent fallout are the subject of a book, Bad Blood: Secrets and Lies in a Silicon Valley Startup, by The WSJ reporter John Carreyrou, and an HBO documentary feature film, The Inventor: Out for Blood in Silicon Valley.