Attorneys representing Elizabeth Holmes claimed she did not intend to defraud investors but merely failed at her job as the trial for the former Theranos chief executive began Wednesday.
“A failed business does not make a CEO a criminal,” Lance Wade, an attorney representing Holmes, said in a federal courthouse in San Jose, California on Wednesday, arguing that Holmes “made mistakes, but mistakes are not crimes,” according to CNBC.
“Ms. Holmes did not go to work every day intending to lie, cheat and steal,” Wade said, CNBC reported.
Holmes is the founder and former chief executive of Theranos, a biotechnology company that advertised itself as a manufacturer of affordable and efficient blood-testing equipment. She was indicted in June 2018 by the Department of Justice on nine counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations she misrepresented the effectiveness of the blood-testing technology to investors.
Holmes claimed Theranos’ technology could provide “accurate, fast, reliable, and cheap blood tests and test results,” according to the indictment, when in reality the vast majority of the blood tests Theranos processed were performed by traditional blood testing equipment, a 2015 investigation by The Wall Street Journal reported.
The trial hinges on whether Holmes knew her blood-testing technology didn’t work and whether she intended to deceive investors.
“The defendant’s fraudulent scheme made her a billionaire,” prosecutor Robert Leach said in opening statements, according to CNBC.
“She was touted as one of the most powerful women in business. She was sought as one of the most celebrated CEOs in Silicon Valley and in the world,” Leach said. “But under the facade of Theranos’ success, there were problems brewing.”
At the height of her fame, Holmes’ board of directors included former Secretary of State Henry Kissinger and former Secretary of Defense James Mattis. Leach argued Holmes managed to “dazzle” such figures along with retail partners Walgreens and Safeway, according to CNBC.
Wade argued that Holmes was no villain, and that the reality was “far more human and real, and oftentimes, I hate to say it, technical and complicated and boring,” according to The Wall Street Journal.
“Failure is not a crime. Trying your hardest and coming up short is not a crime,” Wade said, the WSJ reported.
Wade pointed to a number of decisions Holmes made that he characterized as “mistakes,” such as trusting her former lover Ramesh “Sunny” Balwani as her primary advisor, according to the WSJ. Balwani served as an executive at Theranos during the time he was in a relationship with Holmes.
In court filings, Holmes said she suffered abuse at the hands of Balwani, according to CNBC.
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