At the opening of Theranos founder Elizabeth Holmes’ trial, prosecution and defense offered two divergent portrayals of the defendant to the jury: she is either a calculating CEO who lied to get money, or a zealous entrepreneur who made mistakes along the way.
Why it matters: The trial in San Jose, which is expected to last 13 weeks, is the highest profile fraud case yet to come out of Silicon Valley, where startups often “fake it ’til they make it.”
What they’re saying: “The evidence will show that the defendant agreed with her co-defendant on a scheme to defraud Theranos investors and Theranos patients,” prosecutor Robert Leach told the jury.
“This is a case about fraud, a case about lying and cheating to get money,” he added.Deceiving journalists was also a key part of how Holmes carried out her fraud, the prosecution said.
The other side: The defense’s opening statements argued that, though Theranos ultimately failed and things didn’t work out, that was because Holmes made mistakes — rather than committed crimes.
“Elizabeth Holmes worked herself to the bone for 15 years trying to make lab testing cheaper and more accessible,” Holmes defense lawyer Lance Wade told the jury in the late morning. “Now, in the end, Theranos failed. And Ms. Holmes walked away with nothing. But failure is not a crime.” Those mistakes included trusting ex-Theranos president Ramesh “Sunny” Balwani (who will stand trial next year), and not being involved closely enough with the company’s clinical lab to spot the problems early. The defense also told jurors that Walgreens, Safeway, and Theranos’ other investors all chose to partner and back the company knowing full well what the company was up to and the potential risks.
The intrigue: Holmes’ lawyer also hinted to the jury that a big scientific breakthrough by Theranos in 2009 having to do with assays significantly bolstered Holmes’ confidence in her company’s potential.
Of note: Among upcoming witnesses are some of the patients affected by faulty Theranos tests.
Go deeper: Silicon Valley’s biggest fraud is on trial