SAN JOSE, CALIF. – Theranos founder Elizabeth Holmes admitted on Tuesday that she provided a journalist with inaccurate information about a lengthy profile she used to solicit investors.
After completing the cross-examination, Holmes defended himself on Friday and was questioned by federal prosecutor Robert Leach about the 2014 Fortune cover story, “This CEO Is Out For Blood, ” written by Roger Parloff.
Leach showed jurors part of Parloff’s standout story about Holmes, in which she appeared in her trademark black turtleneck top: “It currently offers over 200 – and is ramping up its offering: more than 1,000 – of the most commonly ordered blood diagnostic tests, all without the need for a syringe.”
“Do you agree with me that this is an incorrect statement?” Leach asked.
“I believe it now,” said Holmes.
Prosecutors allege Holmes used the Fortune article to entice investors, include it in presentations, and get bindings.
“You have no memory of forwarding the Parloff article to investors or potential investors?” Leach asked.
“I don’t,” said Holmes.
“Refresh your memory,” said Leach, showing the jury an email Holmes sent to Theranos shareholders on June 12, 2014, related to the Fortune story.
Holmes told the jury: “I think I could have handled those communications differently.
Holmes, the once Silicon Valley darling who raised more than $945 million from celebrities like Rupert Murdoch and Don Lucas, is facing 11 fraud charges and could be up to 20 years in prison. if convicted. Prosecutors said Holmes was involved in a decades-long scheme to mislead investors and patients about her company’s blood-testing technology. She pleaded not guilty.
Over two days, prosecutors cross-examined Holmes for discrepancies in her statements to investors, business partners and employees.
Tuesday’s testimony also mentioned the US military’s intended use of Theranos devices.
Several witnesses, including former Safeway CEO Steve Burd, as well as Lisa Peterson, who represented the DeVos family as investors in Theranos, testified that Holmes told them the technology had deployed by the US military in the Middle East.
But on the ground, Holmes admitted that the Theranos device was never deployed on the battlefield.
Holmes also admitted that the second-in-command and her boyfriend at the time, Ramesh “Sunny” Balwani, never told her or the investors that Theranos devices were used on the helicopter. of Medevac or on the battlefield.
Leach also asked Holmes about his 2015 revenue forecast of nearly $1 billion when internal estimates were much lower. Holmes testified that the number came from a financial model, but she doesn’t think of herself as presenting the estimate to investors.
The document also showed expected revenue of $40 million from pharmaceutical companies, but Holmes testified that the company had no contracts with pharmaceutical companies at the time.
“You can’t define a single pharmaceutical contract,” says Leach. “You have no revenue from pharmaceutical companies in 2014?”
“We didn’t,” Holmes told the jury.
In his testimony, Holmes said that Balwani was responsible for specific parts of the company, including financial forecasting.
“You know that ultimately at the end of the day you’re responsible for Theranos’s finances?” Leach asked.
“I did,” Holmes testified.
Her testimony continued on Wednesday. After three months of the blockbuster trial, the defense is expected to put the case on hold this week.
