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Former CEO of Theranos Elizabeth Holmes (Elizabeth Holmes) is a glorious $9 billion technology start-up company that claims it is changing the world of health care where people treat one drop of blood at a time.
In her heyday, Holmes, who wore a turtleneck and had a hoarse voice, was hailed as a subversive genius and investor darling. She claimed that Theranos had created proprietary technology-a machine called Edison-with a drop of blood. To screen for various medical diseases. Conditions, touted it as the future of laboratory testing technology.
Theranos claimed that Edison could cheaply conduct life-saving tests almost anywhere, using only a finger pricked blood instead of drawing a whole vial from a vein.
The machine will save money for patients and doctors, and has the potential to provide early diagnosis of more than 200 diseases in convenient locations such as grocery stores and pharmacies.
That is, if it does work. In 2015, The Wall Street Journal Broke the story Based on the whistleblower’s report and in-depth research on the data, these data show that the proprietary technology owned by Theranos is inconsistent (if any), and that the tests are conducted behind closed doors on traditional laboratory equipment.
In 2018, the company closed down. Both Holmes and Ramesh “Sunny” Balwani, the former president and chief operating officer of Theranos, are now facing criminal charges.
Years after the scandal broke out, the jury for Holmes’ trial is scheduled to start on Tuesday. This is what you need to know.
Elizabeth Holmes (right) faces two counts of conspiracy to commit wire fraud and nine counts of wire fraud [File: Nina Riggio/Bloomberg]Wait, isn’t she once called a female Steve Jobs?
Yes. Holmes is known for his fascination with the Apple founder and imitated him in many ways, including wearing the same iconic turtleneck sweater and calling her Edison machine the “iPod of healthcare.”
Theranos also used exquisite marketing materials designed by the same company that Apple used for its iconic advertising.
Holmes was also influenced by other Silicon Valley idols. According to the Wall Street Journal John Carreyrou, one of Holmes’ early mentors was Oracle co-founder Larry Ellison, who allegedly told Holmes to push her team even if the team told her that expectations were not feasible.
Investors are also attracted by Holmes’ genius background: she dropped out of Stanford University at the age of 19. Many people also want to get into the bottom of what they think might be a $1 billion company, with a woman at the helm and helping people.
Before falling out of favor, Elizabeth Holmes, who was recognized as a billionaire at the time, was invited to speak at important gatherings such as the 2015 Fortune Global Forum, which brought together Fortune 500 CEOs and CEOs from some of the largest emerging companies. Innovators, builders and technical experts [File: David Paul Morris/Bloomberg]So what is Sherlock Holmes being accused?
Holmes and Balwani are charged The indictment stated that there were two counts of conspiracy to commit wire transfer fraud and nine counts of wire fraud, suspected of participating in “a multi-million dollar plan to defraud investors and a separate plan to deceive doctors and patients.”
The two are being tried separately, and Balwani’s court date is set for January 2022.
Sherlock Holmes’ trial was previously postponed due to pregnancy. In July, she gave birth to a baby boy.
What is the alleged fraudulent content?
Holmes and Balwani are accused of “using a combination of direct communications, marketing materials, media statements, financial statements, models, and other information to defraud potential investors.”
They are some influential investors. Theranos has many first-class supporters, including Oracle co-founder Ellison, Wal-Mart founder Walton family, media mogul Rupert Murdoch, and former US Secretary of Education Betsy Dworth. Theranos’ board of directors includes former U.S. Secretary of State Henry Kissinger.
At that time, many smart people thought that Holmes’ machine would change the world. but it is not the truth.
Holmes (right) even attended the state banquet of former Japanese Prime Minister Shinzo Abe at the White House in 2015. She was formally charged with fraud three years ago [File: Andrew Harnik/AP Photo]How did the world discover that the machine was not working?
Just as Theranos has attracted media attention during its rapid rise, it has also attracted media attention.
Carreyrou broke the news for The Wall Street Journal with the help of certain whistleblowers inside Theranos (including Tyler Shultz).
Schultz is the grandson of former U.S. Secretary of State George Schultz, and the company’s board of directors is a research engineer. When he noticed the “quality control failure” of the Edison machine, he started talking to Carreyou in secret.
The initial attempts to correct the problem internally went unattended, which caused Schultz to withdraw from Theranos and record the disturbing things he saw at work.
Has anyone been hurt by a machine?
In 2018, nine people who had used Theranos blood testing technology stepped forward. As part of a class action lawsuit filed against the company and pharmacy Walgreens, Walgreens partnered with Theranos to provide testing.
A patient claimed that she had tested positive for an autoimmune disease on the Theranos device, which prompted her doctor to perform a series of tests to determine that she did not have the disease.
Another woman using Theranos device said that the test confirmed that she was positive for Hashimoto’s disease, a thyroid disease that caused her to change her lifestyle, take medications and make appointments for medical treatment, while seeking additional treatment that she does not need .
Elizabeth Holmes (center) and her legal team did not comment too much on her defense to the public [File: Nina Riggio/Bloomberg]What defensive measures will Holmes take?
This remains to be seen, as her legal team has not yet commented on this in the media.
A common defense strategy used in wire fraud cases may be the so-called “good faith defense”-the founder of the company did not intentionally mislead investors. But given the depth and breadth of information about the company discovered by Carreyrou and others, this may be difficult to achieve.
There are also speculations about whether Holmes’ mental health will be mentioned.
How long is the trial expected to last?
The jury selection begins on August 31.
However, excluding jurors who say they have read, watched or listened to a large number of books, series and podcasts about Theranos has become the subject of a dispute between Sherlock Holmes’ attorney Kevin Downey and U.S. District Judge Edward Davila.
Has Silicon Valley changed after the Theranos scandal?
Yes-ask female entrepreneurs, they said they have been asked about Sherlock Holmes and are facing excessive scrutiny by investors.
But for investors and startup founders, the long-term benefit may be more regulation and checks and balances in Silicon Valley, a previously wild West style world.
Faced with so many risks, new startups may choose to create more open workplaces to listen to employees’ concerns and communicate more transparently with investors and board members.
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