“Never,” she responded. Investors were interested in what the company could achieve in the future. “They weren’t interested in today or tomorrow or next month, they were interested in what kind of change we could make.”
Holmes finished testifying Wednesday in her criminal wire fraud trial. The defense rested its case shortly afterward. Closing arguments in the case are expected to begin Dec. 16.
During her testimony, which stretched over seven days, the prosecution pushed her to confirm that as CEO, she was responsible for the company and its finances, and that she knew Theranos’s technology was not being used by the military and that the company was relying on third-party machines.
Holmes, who is charged with 11 counts of wire fraud and conspiracy to commit wire fraud, has tried to push blame off onto employees working for her. She has said that she believed what her workers were telling her and thought things at Theranos were going well, in general.
Holmes rocketed to Silicon Valley stardom nearly a decade ago when she started speaking publicly about Theranos’s vision — a small, portable machine that could take just a few drops of blood from a patient’s fingertip and run hundreds of tests. It was meant to make blood testing cheaper, easier and faster for patients. Holmes managed to garner support from a number of prominent investors, including Rupert Murdoch, Henry Kissinger and Jim Mattis. The company raised about $900 million and signed deals with Walgreens and Safeway.
But a 2015 Wall Street Journal investigation revealed that employees were concerned the technology didn’t work as advertised, and sometimes gave incorrect results. The technology could run at most a dozen tests, not hundreds, trial witnesses have said, and Theranos never succeeded in its goals of launching its technology with the military or with Safeway.
Theranos collapsed in 2018 amid media and regulatory investigations. Holmes and her former romantic and business partner Sunny Balwani were charged together, and both have pleaded not guilty. Balwani’s trial is scheduled for January.
Last week, prosecutor Robert Leach pushed Holmes to take responsibility for Theranos, which Holmes founded and led as CEO for more than a decade. Prosecutors allege that she misled investors about the success of the company’s fingerpick blood-analyzing technology.
“And you take responsibility for the company, is that your testimony?” he asked.
“I do,” she responded.
“And you agree with me that anything that happens in your company is your responsibility at the end of the day, isn’t that right?” he followed up.
“That’s how I felt,” she said.
Holmes took the stand in a somewhat surprising move on a Friday afternoon in mid-November. Calling a defendant to the stand is a high-risk, high-reward proposition, said Robert Dugdale, a former federal prosecutor and now partner at Kendall Brill & Kelly who specializes in white-collar defense work.
One reason to risk the testimony is that Holmes can respond to some prosecution allegations that no one else could, he said.
“Ms. Holmes really provides the clearest way of telling her story that no other witness can,” said Dugdale, who is not involved in the case.
Holmes also accused former partner Balwani on the stand of abusing and controlling her — an aspect of her life that affected everything, she said. (Balwani, in court documents, has denied the allegations).
Holmes regularly asserted that her employees were telling her things were promising, and though there were issues, overall Theranos’s technology was progressing well. But Leach pushed Holmes on her belief — pointing out that in one instance, a presentation she received from an employee about the capability of the company’s blood-testing device was talking about future potential, not current realities.
After discussing a report from a regulator agency that found Theranos had “deficient practices,” Leach asked Holmes if she continued to downplay the issues to an investor representative.
“I don’t think I did that,” she said.
“Well, let me refresh your memory,” he said, repeating the refrain several times throughout his questioning before bringing up various emails or documents.
Holmes’s lawyer again affirmed with Holmes on Tuesday that she did not tell outside investors or business partners that Theranos was relying on modified third-party blood testing machines because it was protecting the company’s “trade secrets.”
The jury is expected to begin deliberations by the end of next week.