Updated Jan 3, 2022 - Health

Theranos founder Elizabeth Holmes found guilty

Photo illustration of Elizabeth Holmes frowning.

Photo illustration: Aïda Amer. Photo: Justin Sullivan/Getty Images

Elizabeth Holmes, the founder and former CEO of blood-testing company Theranos, on Monday was found guilty of conspiracy and fraud against certain investors by a California jury.

Why it matters: Holmes was the poster child of Silicon Valley hubris, taking "fake it till you make it" to illegal extremes. She was found not guilty on several charges relating to patients and company ads in Arizona.

  • Holmes was found guilty of four charges of wire fraud and conspiracy to commit wire fraud with regards to certain investors (though the jury couldn't reach a verdict in the case of three counts relating to investors).
  • Holmes is expected to appeal. Each guilty verdict carries a maximum sentence of 20 years in prison though she would likely serve them concurrently, the New York Times notes.

This case was specifically about what Holmes told Theranos investors, although her lies also impacted partners and patients.

  • The company raised over $1 billion, including at a valuation of nearly $11 billion, from an eclectic mix of investors that included Rupert Murdoch, Tim Draper, Betsy DeVos, James Mattis, the Walton family and the Cox family.
  • Theranos dissolved in 2018, laying off all remaining employees and giving back what little cash it had left to creditors.

The big picture: Prosecutors keyed in on what they called "knowingly false statements" made by Holmes, particularly over what could and couldn't be done by Theranos' blood analysis technology.

  • Defense attorneys portrayed Holmes as more naïve than duplicitous, and as the victim — both psychologically and sexually — of former Theranos COO Sunny Balwani, whose own trial is slated for later this year.

What's next: During a hearing next week, federal prosecutors are expected to tell the court how they'd like to proceed with the three counts that have been declared a mistrial.

  • While Holmes will not be detained for now, prosecutors have asked for her to be out on a secured bond. A sentencing hearing will be set at a later date.
  • Balwani is now set to stand his own trial on similar charges, next month.

Editor's note: This post has been updated with new details throughout.

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