When people hear the term “court case” in the news, they usually think of the Supreme Court hearing a case on abortion or immigration. Not too often do people see a federal case make the headlines. Former CEO of Theranos and Silicon Valley star Elizabeth Holmes has made headlines again as jury picking for her case begins. While some have heard of the case on social media, the details are not widely known. Who is Elizabeth Holmes, and did she go from Silicon Valley “Cinderella” to disgraced “wicked step-sister.”
Elizabeth Holmes began her career with a passion for medicine and a fear of needles. She originally wanted to study medicine in college but switched to chemical engineering because of this fear. She studied at Stanford, eventually receiving the “president’s scholar” to fund her college project. After her freshman year, she interned at the Genome Institute, which drove her to start a company. Her newfound company Real-Time Cures (which later became Theranos) became Holmes’s main focus, eventually leading her to drop out of college. She started work on a blood test system that required a few drops of blood, which became the main focus of Theranos. This idea got the attention of many investors, accumulating over $700 million dollars. These investors had no idea what problems Theranos would cause.
Holmes was very uptight upholding the security of Theranos, even taking 4 of her employees to court over leaking company secrets. She told investors that she would not tell them how Theranos technology worked and she had the final say. Many people were quick to point out the similarities between Holmes and Steve Jobs, former Apple CEO, like appearance and business strategy. Theranos began partnering with outside pharmaceutical companies to open testing centers. Elizabeth Holmes became the youngest self-made female billionaire in Silicon Valley. However, Holmes’s quick success was cut short when Theranos chief scientist warned Holmes that their test was not ready for public use as there were inaccuracies in the technology. An FDA investigation found “major inaccuracies” in Theranos’s test.
Theranos took a turn for the worse when Wall Street Journal’s John Carreyrou published his investigative report on Theranos exposing its inaccuracies to the public. Carreyrou’s report also revealed Theranos had used competitor testing equipment and tainted samples to make Theranos’s technology look accurate. A Securities and Exchange Commission (SEC) investigation revealed “massive fraud” resulting in Holmes paying a $500,000 fine and return of 18.9 million shares of Theranos, and losing control of the company. Shortly before Theranos announced the company was being shut down, a federal grand jury charged Holmes with wire fraud.
Holmes now faces 12 counts of fraud, in which she has pleaded not guilty. The courts are selecting a grand jury, and then the arguments will commence. If convicted, Holmes could face 20 years in prison. It will also solidify the legacy of Elizabeth Holmes: Silicon Valley heroine or a villain.
Sources
BBC: Theranos founder Elizabeth Holmes ‘lied and cheated’, trial hears
Forbes: Theranos: Elizabeth Holmes’s Witting And Unwitting Accomplices
Business Insider: Elizabeth Holmes: Rise and Fall of Theranos Founder Now on Trial