SAN JOSE — Former Theranos chief executive Elizabeth Holmes testified that her ex-romantic and business partner wanted to “kill the person” that she was, to make her into a “new Elizabeth.”
Holmes said Balwani did not force her to say certain allegedly misleading things to investors or journalists, or control her interactions with the board of directors or business partners. But she said his influence was deeply felt.
“He impacted everything about who I was,” Holmes said. “And I don’t fully understand that.”
Holmes, who testified for a fourth day, is facing charges that she misled investors about her company’s technology, by purposefully making it sound more successful and reliable than it was. Theranos, which crumbled in 2018 amid regulatory and media investigations, has become a cautionary tale in Silicon Valley, and Holmes has reached an infamous status as a once-celebrated CEO with a meteoric rise and catastrophic fall.
Holmes’s attorneys finished their questioning of her Monday. Prosecutors will begin cross-examining her Tuesday.
In the trial, which has lasted nearly three months, prosecutors have called nearly 30 witnesses, including former employees and business partners who testified of unease, disappointment and inconsistent testing results within Theranos. Holmes took the stand earlier this month to argue that she acted in good faith and believed that she was representing an accurate view of the company.
In documents filed before the trial began, Holmes’s attorneys indicated she would argue that Balwani abused her. (In court documents, Balwani has denied the claims.) An attorney for Balwani did not immediately respond to a request for comment during Holmes’s testimony Monday.
Holmes became teary-eyed on the stand as she described dropping out of Stanford University, in part, because she had been raped. Shortly after, she said, she struck up a relationship with Balwani, who would go on to become a Theranos executive.
“He said that I was safe now that I had met him,” she said. Holmes had met Balwani the summer before starting at Stanford. She was 18, and he is about two decades older.
Balwani had a specific idea of how to make her into a good entrepreneur, Holmes testified, including her eating only certain foods that would make her “pure” and give her energy for the company, not sleeping much and having a “very disciplined and intense lifestyle.”
When she failed to live up to his expectations, Holmes said, Balwani would yell at her and sometimes force her to have sex with him when she didn’t want to, because “he would say to me that he wanted me to know that he still loved me.”
In Holmes’s first days testifying, she stuck to her defense that she was acting in good faith while she ran the start-up and said that she trusted staffers when they told her things were going well in the lab and with the business. When a whistleblower employee raised concerns, she took them seriously and had another employee address them, she said.
The blood-testing start-up said it could run hundreds of diagnostic tests from just a few drops of blood drawn from a patient’s fingertip. In reality, prosecutors and government witnesses said over weeks of testimony, the device was used only for a limited number of tests and was often unreliable. Theranos raised about $900 million from investors, and Holmes rose to start-up stardom.
Holmes is charged with 11 counts of wire fraud and conspiracy to commit wire fraud for allegedly misleading investors and patients about Theranos’s technology and financials. She has pleaded not guilty.
Holmes’s decision to testify on her own behalf has prompted a new frenzy of interest in the blowup of the blood-testing start-up. In 2015, the Wall Street Journal broke the news that some of the company’s technologies did not work as expected. From there, Theranos unraveled over the course of several years, dissolving in 2018. A documentary, book and podcast have since detailed what went wrong.
Holmes has helped drive that attention with her adherence to the mannerisms and attire of Silicon Valley CEOs. A Stanford dropout, she was one of a few young, female entrepreneurs to skyrocket to fame. She graced the covers of Fortune, Forbes and Inc. and did onstage interviews and a TedMed Talk, with her signature low voice and confident body language. She frequently wore her hair in a bun and modeled her wardrobe in the style of Steve Jobs, with black turtlenecks.
Those hoping to attend the trial to hear her speak have been arriving before 4 a.m. to secure the limited number of seats in the courtroom. Holmes walks toward the crowd each morning, now sporting her softened look of wavy blond hair and blue or green dresses and matching masks before proceeding through the metal detectors to enter the courtroom.
Government prosecutors have the burden of proving that Holmes intended to defraud investors and patients. Holmes’s defense team is asking her questions that indicate she believed what she said was true — and therefore did not have the intent to defraud.
Before Holmes resumed testifying Monday, the judge heard arguments from lawyers about whether Holmes can present previous testimony from her former partner Balwani. The judge has not yet ruled on the issue.
Balwani is charged with the same counts as Holmes, but the two cases were separated after Holmes’s lawyers alleged in pretrial documents that Balwani had abused her.
Holmes’s lawyers said in a filing last week that Balwani’s attorney told them he would invoke his Fifth Amendment rights and refuse to testify if called as a defense witness. Instead, the defense wants to present testimony that Balwani gave during a Securities and Exchange Commission investigation.
The SEC charged Balwani and Holmes with massive fraud in 2018. Holmes settled the charges, but the SEC has a case pending against Balwani. That case has been paused while his criminal case proceeds. Balwani’s trial is scheduled for January.
On the stand last week, Holmes admitted that Theranos was using modified third-party machines but said she did not tell outside partners, because she was advised to protect trade secrets. She also said she was the one who added logos from two pharmaceutical companies to reports that Theranos sent to investors. Previous witnesses testified that made them think the reports were endorsed by the pharmaceutical companies, but representatives of the two companies denied that they approved the final reports.
Holmes said it was not her intention to make investors think the pharmaceutical companies had prepared the reports but said she now wished she had handled the matter differently.