Billionaire Elizabeth Holmes convicted of fraud; A look into the journey of the fallen Silicon Valley Star
Elizabeth Holmes, an American businesswoman, who has been regarded as Silicon Valley’s self-made billionaire, was found guilty in a fraud trial. She was defrauding investors in her blood-testing startup Theranos, in a high-profile case seen as an indictment of Silicon Valley culture.
During the trial, Prosecutors said Holmes knowingly lied about technology she said could detect diseases with a few drops of blood. Jurors found Elizabeth guilty of conspiracy to defraud investors and three counts of wire fraud but then she denied the charges, which carry a maximum prison term of 20 years each.
The 37-year-old now faces the possibility of years behind bars, in a case that put on trial the line between startup hustle and criminal dishonesty.
Elizabeth who was convicted of criminal fraud this year in January had been named the youngest and wealthiest self-made female billionaire in America on the basis of a $9-billion valuation of her company by Forbes. The next year, following revelations of potential fraud about Theranos’s claims, Forbes revised its estimate of Holmes’s net worth to zero, and Fortune named her in its feature article on “The World’s 19 Most Disappointing Leaders.”
However, the decline of her company Theranos began in 2015, when a series of journalistic and regulatory investigations revealed doubts about the company’s technology claims and whether Holmes had misled investors and the government. In 2018, the US Securities and Exchange Commission charged Theranos and Holmes with deceiving investors by “massive fraud” through false or exaggerated claims about the accuracy of the company’s blood-testing technology. However, Holmes settled the charges by paying a $500,000 fine, returning 18.9 million shares to the company, relinquishing her voting control of Theranos, and being barred from serving as an officer or director of a public company for ten years.
In June 2018, a federal grand jury indicted Holmes and former Theranos chief operating officer (COO) Ramesh Balwani on nine counts of wire fraud and two counts of conspiracy to commit wire fraud, with the victims being investors and patients. The trial began on August 31, 2021, and ended in January 2022. Holmes was convicted of defrauding investors, and not guilty of defrauding patients.
Holmes later had pledged to revolutionize diagnostics with self-service machines that could run an array of tests on just drops of blood, a vision that drew high-profile backers and made her a billionaire by the age of 30. The story of Holmes’ career, the rise and fall of her company, and its subsequent downfall is the subject of a book later.
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Apart from this, Holmes personally put the logos of pharma giants Pfizer and Schering-Plough, without their permission, onto Theranos reports hailing the company’s blood-testing technology, which was then shared with investors. However, Holmes now faces the possibility of 20 years behind bars for each conviction.