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One-time Silicon Valley darling Elizabeth Holmes convicted of fraud

Business

The jury in the trial of Elizabeth Holmes, founder of blood-testing startup Theranos, has found her guilty on four charges of conspiring to defraud investors.

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The 37-year-old was convicted on four of 11 counts.

Holmes was acquitted on four counts and the jury could not reach a decision on three counts.

Prosecutors said Holmes swindled private investors between 2010 and 2015 by convincing them Theranos’ small machines could run a range of tests with a few drops of blood from a finger prick.

Holmes was also charged with misleading patients about the accuracy of the tests.

Holmes rose to Silicon Valley fame after founding Theranos in 2003.

Wealthy private investors including media mogul Rupert Murdoch invested millions in the company after meeting with the founder.

The case has shed light on Theranos’ failed endeavour to revolutionise lab testing.

The company secretly relied on conventional machines manufactured by Siemens to run patients’ tests, prosecutors said.

Theranos collapsed after the Wall Street Journal published a series of articles suggesting its devices were flawed and inaccurate.

Holmes was indicted in 2018 alongside Theranos’ former chief operating officer Ramesh ‘Sunny’ Balwani.

She had pleaded not guilty to nine counts of fraud and two counts of conspiracy.

Balwani has pleaded not guilty and will be tried at a later date.

During the trial in San Jose, California, which began in September, jurors heard testimony from former Theranos employees who said they left the company after witnessing problems with its technology.

Investors testified Holmes made misleading claims about Theranos, such as that its machines were being used in the field by the US military, and former patients told jurors they would not have used Theranos if they had known the tests were flawed.

Prosecutors said had Holmes been truthful with investors and patients, the venture would not have attracted critical funding and revenue.

“She chose fraud over business failure. She chose to be dishonest,” Assistant US Attorney Jeff Schenk said at the start of closing arguments.

“That choice was not only callous, it was criminal.”

Testifying in her own defence at trial, Holmes said she never meant to deceive anyone and that Theranos’ lab directors were in charge of test quality.

In closing arguments, defence attorney Kevin Downey said the evidence did not show Holmes was motivated by a cash crunch at Theranos but rather thought she was “building a technology that would change the world”.

“You know that at the first sign of trouble, crooks cash out” but Holmes stayed, Downey said.

“She went down with that ship when it went down.”

-AP

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