Lawyer Monthly - January 2022 Edition

14 WWW.LAWYER-MONTHLY.COM Theranos, a blood testing start-up founded by Elizabeth Holmes in 2003, was once renowned in Silicon Valley. The company claimed that its “Edison machine” lab instruments could detect conditions such as cancer and diabetes quickly and from a few drops of blood, without the requirement of a needle. If it proved to be as reliable as Theranos assured investors, the technology promised to revolutionise the $74 billion blood testing industry. Excitement surrounding the product propelled the company to a $9 billion valuation by 2014 and established Holmes as one of the youngest “self- made billionaires” in the US. A year later, Theranos came under widespread scrutiny following the publication of an explosive report from the Wall Street Journal, which found that the start-up had allegedly been collecting samples through traditional means and diluting them to be analysed in machines built by other companies rather than its Edison device. Theranos dissolved in 2018 and 37-year-old Holmes was charged with wire fraud and defrauding patients. She pleaded not guilty to the charges, each of which carries up to 20 years in prison. Holmes’s defence team argued that she fully believed all alleged misrepresentations of Theranos’s technology and claimed that controlling behaviour on the part of her ex-partner, Ramesh Balwani, “erased her capacity to make decisions”. This case is one that Lawyer Monthly has been following closely since the summer, and is notable for the number of high-profile individuals it has entangled. Holmes was able to secure more than $900 million in funding from the likes of media tycoon Rupert Murdoch, US Treasury Secretary George Schultz and America’s richest family, the Waltons. At its height, directors on the Theranos board included Henry Kissinger and future US Secretary of Defence James Mattis. Owing to this background and the enduring loyalty of Holmes’s supporters, the case has also captured the public imagination to a significant extent. Holmes has been the subject of a book, an HBO documentary and an upcoming film and TV series, and has not lost all of the celebrity she once enjoyed while appearing on the front covers of Forbes and Inc. magazine. Holmes’s three-month trial reached its conclusion on 3 January 2022 as a jury convicted her of three counts of wire fraud and one count of conspiracy to commit wire fraud. Holmes was found not guilty on four further counts relating to defrauding patients. However she is ultimately sentenced, the case is a landmark moment for Silicon Valley and a stark window into the darker side of its start- up culture. Elizabeth Holmes Heads to Trial Elizabeth Holmes Credit: Tali Mackay at English Wikipedia (https://creativecommons.org/licenses/by-sa/4.0/deed.en)