Elizabeth Holmes, the founder, and CEO of Theranos a blood testing and life science firm. Read to know why she’s undergoing a trial and what are the charges against her.
Who is Elizabeth Holmes? Why is she on trial?
Elizabeth Holmes, then 30 years old, founder of a blood-testing company was on top of the world in 2014. Her firm Theranos was valued at $9 billion for revolutionizing diagnosis and lab testing. The company’s latest technology promised to detect diseases such as diabetes and cancer fast and hassle-free. The Stanford drop-out was applauded and called the next Steve Jobs. She dropped out of Stanford at the age of 19 with dreams of making lab testing less painful, cheaper, and faster. Moreover, she was on the cover of major business magazines. The firm also attracted investors like Rupert Murdoch and Henry Kissinger who invested millions in the company.
Holme’s winning strike was how a single pinprick of blood could reveal results from several tests on the machines developed by Theranos. “I’ve been threatening Elizabeth for the past year that I’m going to take the opportunity to be shown around. Talk about being inspired!” said Joe Biden, the then Vice President. “I knew she’d had this brilliant idea and that she had managed to convince all these investors and scientists,” said Dr. Jeffrey Flier. The former dean of Harward Medical School met her for lunch during the peak of Theranos. “She was self-assured, but when I asked her several questions about her technology she didn’t look like she understood. It seemed a bit odd but I didn’t come away thinking it was a fraud,” he added.
The truth behind Theranos and the trial
However, things took a turn in 2015 when the technology she promoted did not work. Holmes was exposed as fake and the company collapsed by 2018. Currently, Elizabeth Holmes and Ramesh “Sunny” Balwani, her colleague and former companion are charged with nine charges of wire fraud. Holmes will be tried first and Bilwani in January 2022. Additionally, they also have two charges of conspiracy. They arise from allegations that they were involved in a scheme to defraud patients, doctors, and investors. They planned to make money by putting several lives at risk.
She always said that Theranos was on to something very big and did not want to reveal details. However, she revealed her knowledge when she failed to answer basic questions on the basic design of the machines. The fraud unwound in 2015 when a whistleblower raised concerns about Edison, the firm’s flagship device. Soon, the fraud was revealed over a series of exposes on the Wall Street Journal. The tests were unreliable and using other commercial machines developed by other companies. “It sounded like the words of a high school chemistry student as opposed to a sophisticated laboratory scientist who’d invented new science,” said James Carreyrou. He is the author of the book ‘Bad Blood; Secrets and Lies in a Silicon valley Startup’ where he reveals the case.
Initially, Holmes was unapologetic and called out the naysayers as envious. “This is what happens when you work to change things. First, they think you’re crazy, then they fight you, then all of a sudden you change the world,” she said in 2018. However, she now claims that Balwani was controlling her decisions and making her deceive the victims.