The trials of Elizabeth Holmes and ‘Sunny’ Balwani churn on towards a March 2021 court date. Two major revelations have entered the record from last Friday 20 November’s flurry of filings on both sides.
- The prosecution introduced panicky Holmes/Balwani texts, iMessages, and Skype messages indicating that Theranos was having major trouble with validating its lab technology from 2014 on. One text from Balwani described a lab as a ‘disaster zone’. “The spreadsheets are replete with admissions by defendant and Balwani that demonstrate their knowledge that their statements to investors were false and misleading and that Theranos’s testing was beset with problems.” CMS in 2015 concluded that their California lab posed an “immediate jeopardy to health and safety.” The messages were from previous civil cases and collected by securities regulators, with many still under seal from those cases.
- The defense for Holmes moved to prohibit prosecutors as ‘unfairly prejudicial’ evidence of Holmes’ wealth, spending, and lifestyle, citing Federal rules of evidence and that this information is not relevant to Holmes’ guilt or innocence on the fraud charges. In 2015, Holmes was worth an estimated (by Forbes) $4.5 bn despite what is claimed as a moderate salary and not selling equity. The government has detailed her company-paid perks such as a luxury SUV, a rented luxury house, and luxury-level travel, in addition to a ‘substantial salary’.
- The defense is also seeking to omit any references to Theranos employees making claims about the technology, including Theranos sales representatives falsely claiming that the FDA approved the company’s lab machines. The grounds to omit are that Holmes could not be responsible for their false statements.
- The defense also seeks to omit transcripts of a company meeting that used profane language to refer to reporting in the Wall Street Journal investigating the company and a competitor at that time, on the grounds that such language is par for the course in High-Tech-Land. Mercury News (may be paywalled)
In a separate case, a former Theranos lab scientist, Diana Dupuy, has claimed that she was wrongfully terminated from her job with medical testing company DiaSorin nine days after receiving a subpoena to testify at the Theranos trial. DiaSorin is claiming the reason is unrelated to Theranos. The suit has been filed in US District Court in San Francisco. Anecdotally, many former Theranos employees have reported that Theranos has been a glaring black mark in their resumes that make them close to unhireable. Mercury News