It was a shocking verdict on Monday in a California courtroom for Elizabeth Holmes, the founder of the American biotechnology company Theranos.
Her conviction was the result of a trial that exposed the commercial culture of Silicon Valley.
In the realm of tech entrepreneurs, Holmes stands out as a rare exception in an industry replete with unfulfilled promises. She also established a clear line between technological innovation and criminal dishonesty through her actions.
In the end, the jury deliberated for a week and found Holmes guilty of four counts of fraud, based on the fact that she tricked investors into investing in her “company,” which promised to revolutionize blood testing using faster and less expensive methods than those used by existing laboratories.
However, the twelve-member panel, which spent weeks listening to arguments from both the defense and the prosecution, as well as complicated evidence, exonerated the executive from four other allegations and was unable to reach a consensus on three of the charges against her.
Depending on the circumstances, Holmes, 37, may face years in prison. She will stay free, and a hearing to set the terms of her bail will be held next week to determine the restrictions of her release. The date of the hearing at which her sentence will be determined was not specified, and the sentence was not delivered when she was released from custody.
Theranos was started by the former Silicon Valley fiancé when she was 19 years old. She claimed that her company would revolutionize the diagnostic testing industry with equipment that could produce speedy findings with only a few drops of blood, a claim that attracted large investors and resulted in her becoming a millionaire at the age of just thirty years old.
She was considered the next figure in the tech world and raised millions of dollars from investors who gambled on her company. However, her empire collapsed when The Wall Street Journal published a report that argued that its machines did not fulfil the promised functionality and that the executive could have misled investors and patients.
Holmes placed the logos of pharmaceutical giants like Pfizer and Schering-Plow on Theranos reports that praised his company’s technology for analyzing blood tests, which were then sent to investors.
This was done without the authorization of those companies, which was a key piece in the arguments of the Prosecutor’s Office that maintained that she deliberately tried to increase the credibility of Theranos to gain financial support.
Theranos attracted prominent figures such as media mogul Rupert Murdoch, former Secretary of State Henry Kissinger and former Secretary of Defense James Mattis.
Although they were all on the witness list, the defense only summoned Holmes, arguing that she believed in Theranos and worked hard on the project but failed. Holmes also blamed her former partner and ex-boyfriend Ramesh ‘Sunny’ Balwani, a businessman nearly twenty years her senior who was her right-hand man in Theranos.
To the point of tears, the American assured the jury that Balwani mistreated her and forced her to have sex, accusations that he refused. Balwani will face another trial for his role in Theranos, whose charges he rejects.
The case has caused repercussions in the United States, for placing a figure in the world of technology on the bench and for placing the ambitious culture of entrepreneurs in the spotlight. It’s rare to see failed Silicon Valley entrepreneurs face fraud charges.
One of the most repeated clichés in the startup world is “pretend until you make it,” which underpins the idea that convincing people to invest huge amounts of money in the hope that one day they will achieve their promised success works.
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