Something from 2021 that has been dragged into 2022 is the trial involving Theranos founder Elizabeth Holmes. The history of Theranos is long and muddy, but it can be summarized. Holmes founded Theranos in 2003 with the idea of revolutionizing blood testing so that less blood needs to be extracted and it could be performed rapidly. This was achieved through their Edison devices and propelled the company to a valuation of 10 billion dollars. Holmes became extremely popular in the process, becoming an icon in the business world. However, this was all found to be fake and fraudulent, misleading investors and leaving the business valueless. Holmes faced fraud charges, and her trial for criminal charges started in August 2021.
Now, we finally have a verdict after 12 weeks. The jury found Holmes guilty on 4 of 11 charges, 3 of them being wire fraud charges and 1 being a conspiracy charge. There was heavy deliberation between the jury with them failing to decide on 3 of the charges, but Holmes could face up to 20 years of prison for each charge. This marks another sad turn in the story of the criminal Silicon Valley start-up, and Holmes showed her remorse and regret, but her intentions were clear as shown by the evidence in the trial. The upcoming event in this saga is Sunny Balwani’s trial, and he’s facing 12 charges. Balwani was Holmes’ romantic partner and COO of Theranos, and in recent light she has accused him of physical and emotional abuse. This breaks a recent trend in white-collar crime, with white-collar prosecutions down 24 percent in the last 5 years, but it looks like the jury had enough evidence to convict Holmes of fraudulence here. What do you think will happen in Balwani’s case?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.