As the second day of testimony began at Theranos’ fraud trial, Elizabeth Holmes’ defence attorney put the device in evidence. The high-stakes trial centers on claims that Holmes, Theranos’ former CEO, engaged in “massive fraud” and “massive stealing”.
The case hinges on Holmes’ top-secret blood testing machine, the Edison. In a normal lab, blood is drawn from a patient in a convenient blood sample collection device, then analyzed through expensive technology. The machine at Theranos was different. It relied on proprietary technology whose exact capabilities, use and cost were never made public. Theranos CEO Elizabeth Holmes used the narrative that Edison would solve medical problems that standard blood testing could not address.
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In one exchange from opening statements, John Hueston, an attorney for the US Securities and Exchange Commission, reminded jurors that the prosecution’s theory is the device was essentially a ruse to get insurance companies to pay for medical tests the Edison simply was not capable of performing.
At issue is whether Holmes lied to investors about the Edison’s capabilities in order to finance her science research and its adoption in a hospital laboratory at Stanford University. A judge dismissed the SEC’s case that Holmes faked a degree from Stanford. At this trial, the evidence is all in the devices.
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In addition to using the devices in certain high-risk cases, investigators said Holmes and other employees lied about the general viability of the technology on investor calls. Investigators say that Holmes gave false information to investors during a meeting at the University of Texas on 14 December 2013, in an attempt to make a deal with the hospital system HealthSouth to use Edison.
Holmes and Elizabeth Mastromarino, Theranos’ former chief financial officer, both testified in their own defence. Holmes maintains that she fully understood what the Edison could and could not do and that she never misled any investors or doctors.