Thu. Jan 20th, 2022

Elizabeth Holmes knew how to tell a good story from the start. She launched her blood testing company, Theranos, with a story of a powerful vision to revolutionize healthcare and change an old, outdated industry. She introduced herself as Steve Jobs, part two. She sketched a picture of someone in charge.

That Holmes, and that story, is what District Attorney John Bostic tried to return to during his rebuttal argument, the last word before the case went to jury Friday afternoon. It wasn’t reasonable to think that a company’s CEO wasn’t quite sure what impression she was making on investors, Bostic said. It was clear she was aware of issues with the Theranos tests. Holmes knew that the technology wasn’t working as intended and that Theranos might not be able to change the world. When that story started falling apart, she did everything she could to keep it together.

“We admire people who set ambitious goals and want to achieve them,” said Bostic. “Instead, we see a CEO of a company so desperate for success, so afraid of failure, that she was willing to do anything to prevent that company from failing.”

But in the closing arguments of her fraud trial, which concluded Friday, her attorney Kevin Downey also told a story. This story was about a well-meaning CEO who relied on what experts told her, who was unaware of issues in her company, and who couldn’t be blamed when people misinterpreted the things she told them about Theranos. It relied on undercutting the origin story to convince the jury that she was not guilty of the charges against her.

To find her guilty of those charges – wire fraud and conspiracy to commit wire fraud – the jury must believe Holmes meant to give people misleading information about what the Theranos technology could do. That intention is important, Downey emphasized during his closing arguments.

To find out that the intent has to get inside Holmes’ head during the times she lied or said things that could be misleading. When Holmes told investors and reporters that the Theranos devices could perform hundreds of accurate tests, Downey said she was actually referencing what the company might do in the future, about future iterations of the Theranos device.

And when Holmes told investor Bryan Tolbert, vice president of finance for the Texas-based Hall Group, that the company did “a lot of work” with the military, she didn’t mean that Theranos devices were in active use in the military — just that it company was working towards that goal. (Investors say Holmes told them the company’s devices were used in Afghanistan and on medevacs.)

If investors got the wrong idea, well, it was because they misinterpreted things, Downey said. And even if they misinterpreted things, it didn’t really matter, he said. These kinds of statements by Holmes were not the reason investors decided to give Theranos money. Holmes and the things she said weren’t really that critical to the decision-making process, Downey said. Investors simply cared that Theranos had a partnership with Walgreens. (Multiple investors said they trusted the stories Holmes told them about Theranos’ abilities.)

Holmes also cannot be responsible for problems with the Theranos technology, Downey said. Other people were responsible, such as the former director of the Theranos lab, Adam Rosendorff. Holmes thought the tests were accurate. She saw positive reviews from happy customers and the company apologized every time there was an error. She had no reason to think there were any issues to worry about, Downey said. (In fact, Theranos scientists have repeatedly reported serious problems to Holmes in emails revealed during the trial.)

Holmes wasn’t acting like someone with something to hide, Downey said. She hired a high-profile board of directors—a former secretary of state, a former senator, a retired four-star general from the Marine Corps. She allowed people from pharmaceutical companies and academic institutions to scrutinize her company’s technology. She gave information to the Food and Drug Administration. And when news reports and a federal investigation found problems with her labs, she doubled down on her work to find out what went wrong.

“You know that at the first sign of trouble, crooks pay out money, cover up criminals, and rats flee a sinking ship,” Downey said. But Holmes was a committed CEO who believed her company would change the world. Instead of running, she brought in experts to investigate the testing program, Downey noted. “Are those the actions of someone involved in a conspiracy to defraud people?”

There are versions of Holmes everywhere: there’s the one that offered them in media interviews, the one that’s outlined in podcasts, the one that will be fictionalized in the upcoming Hulu series. In the past three months, there were two more, presented by prosecutors and lawyers. Those versions now go to the jury. It’s up to them to decide which story is closest to reality — and whether that reality is criminal.

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