Elizabeth Holmes Speaks for Herself

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who is really To blame for the spectacular collapse of blood testing startup Theranos? Is it Elizabeth Holmes, the founder of Girl Boss, who faces 11 counts of wire fraud for allegedly misleading investors? Or is it the company’s employees who have signed various reports that show that the technology has performed well? What about Theranos’ board members—such as George Schultz, James Mattis, and Henry Kissinger—who paid hundreds of thousands of dollars to advise the company? Or is it Ramesh Balwani, Holmes’ business partner and ex-boyfriend, who faces 11 separate fraud counts?

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Each of these theories has been explored over the past several days as Holmes took the stand, 11 weeks in a trial that has captured Silicon Valley and beyond. It’s the first time he’s told his own story since Theranos was formally shut down in 2018, the same year he was accused of fraud.

Holmes began his testimony on Friday afternoon, which saw a record number of people appear outside the court on Monday and Tuesday morning. Spectators began trembling at 2 a.m. this week as they waited for one of the limited seats at the San Jose Courthouse. The crowd was filled with journalists, concerned citizens and a man shouting “God bless you, Girl Boss!” Holmes arrived on Tuesday. “The Valley has not seen such a high-profile case of trade fraud before,” says historian Margaret O’Mara, who compared the spectacle to early iPhone releases. Holmes benefited from the publicity when the early 2000s His company was starting in 2018. Now he has found himself in a different kind of promotional cycle.


As a young CEO, Holmes often portrayed himself as a rogue. She appeared on the covers of magazines and welcomed comparisons to Steve Jobs. But in court, Holmes — who is now 37, and no longer wears her ever-so-trademarked black turban — insisted on the parts of her job she entrusted to others.

When asked who is responsible for verifying the blood test works as promised, Holmes pointed to Theranos’ lab director Adam Rosendorff. A failed partnership with Walgreens came down to “incredibly smart” employee Daniel Young, who was put in charge by Holmes. The decision not to disclose that Theranos sometimes used third-party tools was attributed to the company’s legal advisor, whom Holmes said was a “trade secret.” Balwani, not Holmes, was in charge of the company’s financial projections. And the famous marketing suggesting Theranos only uses “a drop of blood”? Holmes testified that he did not personally sign every piece of marketing material that was created by Chiat Day, the expensive advertising firm he had hired.

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This type of defect propagation is extremely common in fraud cases, says David Sklansky, who teaches and writes about criminal law at Stanford. “This is probably the most common kind of defense in cases involving allegations of large-scale financial fraud,” he says. “Whether it works or not depends on how credible it seems to the jury.”

But claiming that he does not have the ability to perform such essential functions in his company can easily render him incompetent. “Competent leaders delegate, but they are also sufficiently involved in a company’s day-to-day operations to know, for example, whether testing actually works as designed and whether they are useful to investors. The data back up the bold claims being made,” says Lara Bezelen, a law professor at the University of San Francisco School of Law. The ‘trade secret’ was actually fraud.”

For now, Holmes has been able to tell her story without challenge, the way she rehearsed with her lawyers. When the trial resumes after the Thanksgiving break, the greater test will be how it stands up to prosecutors’ cross-examination. Prosecutors have already called several former Theranos employees as witnesses, who testified that the company had acted on half-truths in several instances. If Holmes succeeds in this trial, the jury has to be convinced that no single founder-CEO can be in charge of it all. Not even Elizabeth Holmes.

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