On Monday, a U.S. jury found Elizabeth Anne Holmes, the former Chief Executive and founder of Theranos, guilty on 4 out of eleven federal charges of defrauding investors in the blood-testing startup.
The twelve jurors tasked with deliberating the fate of Elizabeth Holmes told federal Judge Edward John Davila early on Monday, January 3, that they’re not able to come to a unanimous judgment on three of the charges facing the former CEO of Theranos.
Edward Davila responded by calling the jury members into the courtroom and giving them what is known as an Allen charge, instructing the deadlocked panel to continue ponderings. Should judges fail to reach an agreement, they could still reach a partial decision on the remaining counts.
She was once the toast of Silicon Valley – but tonight, Elizabeth Holmes is a convicted fraudster.
The American tech entrepreneur was found guilty of lying to investors about blood testing technology, which she promised would change the world. @JerrieDemasi #9News pic.twitter.com/cBhVx6kkNS
— 9News Australia (@9NewsAUS) January 4, 2022
Prosecutors said Theranos founder swindled private investors between 2010 & 2015 by persuading them that small machines of Theranos could run various tests with a few drops of blood obtained by fingerstick.
Moreover, Holmes, 37, was charged with misleading patients regarding the accuracy of tests. Elizabeth Holmes rose to Silicon Valley fame after founding Theranos, a now-defunct health technology firm, in 2003. Affluent private investors, including media tycoon Rupert Murdoch, invested millions in the firm after meeting with Holmes.
Fraud Couldn’t Masquerade As Innovation
The judgment came after the four women and eight men on the board spent 3-months sitting through a complex trial that featured reams of evidence and including Holmes thirty-two witnesses. Now, she faces up to twenty years in jail for each count, and 250000 dollars fine for each count, even though legal advisors express she isn’t likely to receive the maximum sentence.
An American historian of the tech industry and professor at the University of Washington, Margaret O’Mara, said that’s a judgment that should matter not just to Silicon Valley but to those who acknowledge it, invest in it and use its products. Moreover, she was made possible by a Valley business culture that commemorated and heartened very young, marginally experienced people.
An ex-US Securities and Exchange Commission (SEC) prosecutor, George Demos, called the decision a significant success for the government and directed a clear signal to Silicon Valley that fraud couldn’t masquerade as innovation.