Who is Elizabeth Holmes?

Holmes founded Theranos in 2003 at age 19, when she was still a Stanford University student in Silicon Valley. She said in a later public speech that she wanted to revolutionize health care. “We see a world in which no one ever has to say, ‘If only I’d known sooner,’ ” she said. “A world in which no one ever has to say goodbye too soon.” She dropped out of university shortly afterward to run the start-up full-time, eventually growing it to about 800 employees and attracting high-profile investors. Theranos’s (ultimately unrealized) goal was to develop a miniature robotic lab that could run hundreds of diagnostic tests from just a small drop of patients’ blood that could be used in drugstores and doctors’ offices. Holmes burst into the mainstream when her company started talking publicly about its technology in 2013. She was a captivating, young female CEO with a deep voice and a tendency to wear a black turtleneck , modeled after her idol, Apple co-founder Steve Jobs. She came across publicly as driven and ambitious, with a genuine desire to make health care less painful and more accessible. But her image fell apart when Wall Street Journal investigations revealed that Theranos’s technology was not working consistently. Those articles said Holmes was running a workplace in which employees were afraid to voice concerns about serious issues and were discouraged from working with other teams. Since her fall from grace, Holmes has kept a low public profile. She has been romantically linked to hospitality heir Billy Evans, and gave birth to a boy on July 10. Her trial was delayed because she was pregnant.

Why was Holmes on trial?

Federal prosecutors charged Holmes and Sunny Balwani, her former boyfriend and company president, with wire fraud for allegedly lying to investors and patients about what Theranos’s technology could do and receiving money for those lies. “Over the course of the last 11 years, we’ve made it possible to run comprehensive laboratory tests from a few drops of blood that could be taken from a finger,” she said in a 2014 TedMed talk, which has since been pulled from the group’s website. “And we’ve made it possible to eliminate the tubes and tubes of blood that traditionally have to be drawn from an arm, and replaced it with the nanotainer.” (The tiny nanotainer, as Theranos called it, was a miniature tube to hold a few drops of blood.) But in reality, the charges alleged, Theranos’s small lab machines were working inconsistently and could only run a few tests on its own technology. Other tests were being run on traditional lab equipment, and some blood samples were being diluted so much that the results were unreliable. Lawyers for Holmes did not respond to requests for comment. An attorney for Balwani, Jeffrey Coopersmith, declined to comment. In 2015, Theranos was valued at $9 billion. Two years earlier, it partnered with Walgreens drugstores in certain parts of the country to attempt to run tests for patients from the stores. Theranos also had a burgeoning deal with grocery store chain Safeway to further expand the use of its technology before it collapsed. “Despite representing to doctors and patients that Theranos could provide accurate, fast, reliable, and cheap blood tests and test results, Holmes and Balwani knew — through, among other means, their involvement in Theranos’s day-to-day operations and their knowledge of complaints received from doctors and patients — that Theranos’s technology was, in fact, not capable of consistently producing accurate and reliable results,” the indictment alleges.

How did Holmes defend herself?

Her defense rested on the culture of Silicon Valley start-ups, and Holmes said she knew about her company’s capabilities while she was in charge. In opening statements , her lawyers argued that while Holmes may have made mistakes, she never crossed the line to committing fraud. “Failure is not a crime. Trying your hardest and coming up short is not a crime,” defense attorney Lance Wade said. Holmes also took the stand in her own defense. She testified for 20 hours, her charismatic and composed responses drawing comparisons to her past media interviews. She told jurors that she acted in good faith and relied on what employees told her about the company’s capabilities. She took that rosy information to investors and business partners like Walgreens and Safeway, never intentionally deceiving them, she testified under questioning from her defense lawyer. She said her deals with such retailers, worth hundreds of millions of dollars, involved the long-term prospects of Theranos, not its current or even near-term outlook. “They weren’t interested in today or tomorrow or next month,” Holmes said on the stand. “They were interested in what kind of change we could make.” Holmes grew emotional at times while discussing her former romantic and business partner Balwani, whom she said physically and emotionally abused her; he has denied the accusations. Although she confirmed that Balwani did not force her to say misleading things to investors, she said his influence was deeply felt. “He impacted everything about who I was,” Holmes said, “and I don’t fully understand that.”

What were the government’s allegations?

Prosecutors said Holmes knowingly misled investors about her company’s blood-testing technology. “Out of time and out of money, Elizabeth Holmes decided to lie,” Robert Leach, an assistant U.S. attorney, said during opening statements. The prosecution presented nearly 30 witnesses during the three-month trial, including former employees, business partners and investors, to show that Holmes was aware of the problems Theranos was having with its technology. Erika Cheung , a lab worker who left the company in 2014, reported her concerns to regulators and within Theranos that the company’s technology was not reliable enough to be used on patients. “It was starting to get very uncomfortable and very stressful for me working at the company,” she said. “I was attempting to tell as many people as I could, but it was not, just not seeming to get through to people.” One prosecution witness testified about the company’s sometimes shaky financial state. A patient and her nurse practitioner testified about a Theranos test result that showed the patient might be having a possible miscarriage , according to the Wall Street Journal. But a follow-up lab test from another lab showed that her pregnancy was healthy. The jury sat through a few hours of attorneys reading aloud text messages between Holmes and Balwani, deeply personal exchanges that captured the attention of courtroom watchers and Silicon Valley experts. “My new life as of this night and forever more,” Holmes wrote to Balwani in November 2014. “Total confidence in myself best business person of the year, focus, details excellent, don’t give what anyone thinks, engage employees in meetings by stories and making it about them (ie prepare well)." “Awesome. U r listening and paying attention,” Balwani responded. The next month, Balwani wrote: “I love you. I admire your wisdom and your strength; and your decency and kindness.” “You know what these things coming from you mean to me,” Holmes wrote back. “What you say to me equals my confidence.”

What was Holmes convicted of, and what happens now?

Holmes stood trial on 11 counts of wire fraud and conspiracy to commit wire fraud. She was convicted on four of those counts related to interactions with investors but acquitted on four other counts related to Theranos’s relationships with patients. The jury of eight men and four women deadlocked on three counts related to defrauding investors. “The guilty verdicts in this case reflect Ms. Holmes’s culpability in this large-scale investor fraud, and she must now face sentencing for her crimes,” said Stephanie Hinds, U.S. attorney for the Northern District of California. Each count carries a maximum sentence of 20 years in prison, though Judge Edward J. Davila of the Northern District of California did not immediately schedule a sentencing hearing. Holmes was not taken into custody after the verdicts were announced, and left the courtroom holding hands with her mother and partner.

Who else is wrapped up in this story?

Holmes was charged with Balwani, but the court agreed to allow the cases to be tried separately. Balwani’s trial is scheduled to start in early 2022. One of the reasons Holmes’s case is so well-known is because of the star-studded list of investors she attracted: prominent Silicon Valley investor Tim Draper; the Walton family, of Walmart fame; media mogul Rupert Murdoch; Mexican businessman Carlos Slim; and former education secretary Betsy DeVos. Theranos’s board members included former secretaries of state Henry Kissinger and George Shultz and former secretary of defense Jim Mattis. Mattis testified during the third week of trial , saying he believed for years that the Theranos technology could run more tests than the number he later learned it could complete. He would have had a different view of the company if he had known more about its limitations, he said. “It would have tempered my enthusiasm significantly,” he said in response to a prosecutor’s questions about Theranos’s use of third-party testing devices. Holmes and Theranos were also extolled by then-Vice President Joe Biden, who visited the company lab, and multiple journalists who profiled and interviewed the entrepreneur.

What happened to Theranos?

Theranos officially closed its doors in September 2018, three embattled years after the Wall Street Journal published its first investigation into the company in October 2015, reporting that Theranos was running many of its tests on machines made by outside companies. In the months and years that followed the Wall Street Journal story, Safeway dissolved its deal with the company and Walgreens sued for $140 million. The Centers for Medicare and Medicaid Services, which oversees clinical labs, found deficiencies at the company’s lab. Theranos settled with the agency and agreed not to operate any clinical labs for two years. Holmes settled with the Securities and Exchange Commission over fraud allegations , and was barred from serving as a director or officer of a public company for a decade. In 2018, Theranos CEO David Taylor, who had replaced Holmes, told shareholders in an email that the company was out of cash. “We are now out of time,” he wrote, according to a copy of the email posted online by the Wall Street Journal.

Why is the case important to Silicon Valley?

The conviction represents one of the few white-collar crime prosecutions of a Silicon Valley executive during the American tech industry’s rise to global dominance. At its height, Theranos helped make Holmes one of the world’s only self-made female billionaires. Theranos exemplified Silicon Valley’s “fake it until you make it” ethos that has propelled start-ups with developing technology or vague business plans to massive valuations. Her story stood out as an extreme, oft-cited example of that culture because of the high-profile investors she attracted and Theranos’s direct involvement in patient health care. Holmes’s guilty verdict, experts say, is a cautionary tale to other Silicon Valley entrepreneurs against overhyping their products.

Didn’t I see a movie about this?

You may very well have. Or read a book. Or listened to a podcast. Holmes and Theranos have garnered significant media attention, notably in the book “ Bad Blood: Secrets and Lies in a Silicon Valley Startup ,” written by the Wall Street Journal reporter who broke the story, John Carreyrou. HBO also debuted a documentary, “The Inventor: Out for Blood in Silicon Valley,” in 2019. ABC aired a podcast (a second season is in the works) called “The Dropout,” and Hulu is working on a television miniseries of the same name, starring Amanda Seyfried as Holmes. There’s more to come — Jennifer Lawrence is attached to play the founder in a movie adaptation of Carreyrou’s book.

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