Elizabeth Holmes, the chief executive officer and founder of Theranos in 2013
Along with Theranos, Elizabeth Holmes, whose trial for large-scale fraud opened on September 8, had sold what was to be groundbreaking biotechnology. Except that behind the promises made to investors, there was nothing.
The ongoing trial in the United States, which will last nearly three months, against Elizabeth Holmes, founder in 2003 of Theranos, a biotech start-up which would revolutionize blood tests but which is today widely regarded as the biggest fraud in Silicon Valley history. We can consider that it is also the trial of one of the most perverse aspects of American tech culture: selling to investors chasing revolutionary innovations and with a high return on investment an incomplete product, or worse that does not exist not.
Significant amounts of the money pouring into Theranos came from billionaire investors, including media baron Rupert Murdoch, Walmart’s Walton family, the DeVos family that included former US Education Secretary Becky DeVos, Mexico business mogul Carlos Slim and former Oracle CEO Larry Ellison.
Holmes founded his start-up at 19, without a diploma. Theranos was to make it possible, thanks to a machine called Edison and from a drop of blood, to perform hundreds of blood tests in a much faster and cheaper way than anything that existed in the healthcare industry then.
Besides recruiting an impressive board, Holmes also raised nearly $US900 million and at the same time, Elizabeth Holmes was on the front pages of magazines such as Forbes, and attending conferences like TedMed in 2014, going as far as almost imitate Steve Jobs in his dress style and gesture, even adopting his habit of wearing mostly black turtlenecks.
As a now famous Wall Street Journal survey revealed in 2015, the company’s teams mostly performed their tests, the number and efficiency of which were well below what the company promised, on machines from competitors.
Which sparked a U.S. Food and Drug Administration investigation and a civil lawsuit filed by the Securities and Exchange Commission that resulted in a $ 500,000 settlement without an admission of wrongdoing, but that was the end of Theranos, which closed in 2018.
Her lawyers have indicated that if she will testify she will said her statements and actions while running Theranos were the result of “intimate partner abuse” inflicted by the company’s chief operating officer and her secret lover, Ramesh “Sunny” Balwani, who faces multiple fraud charges in a separate trial scheduled to begin next year.
Balwani’s lawyer has denied Holmes’ allegations.