The Ponzi- Scheme Defense Rests Their Case
By Saturday, the defense will rest in the case against Elizabeth Holmes and three other defendants accused of fraud in the now infamous once-pioneering startup Theranos, for which Holmes was considered the face of. The last day of testimony will be Wednesday before closing arguments begin. Closing arguments are scheduled for October 31st.
What Does The Theranos Fallout Mean for Theranos and Women Entrepreneurs?
The fallout has been tremendous. Theranos halted many of its blood testing services, sending the company into financial ruin. Theranos also tanked its stock price for three years straight.
In 2016, a Congressional investigation discovered that Theranos knew its devices were not able to successfully detect new malignities in blood tests in August of that year, just months after Theranos had received clearance to market its new devices and months before it raised $908.1 million in capital. A short time later the company began to unravel in the press and in court.
Ultimately Theranos was ordered to refund hundreds of millions of dollars of investors, lost and in some cases gift to the company, while refusing to repay shareholders who lost money due to deception. It may never return to growth status.
Elizabeth Holmes could face prison time, fines, and a permanent ban from the medical device industry as part of a settlement the state of California in April 2018.
Despite these harsh consequences, Holmes, a serial entrepreneur and former child nurse, is determined to return to her entrepreneurial roots.
“While I accept responsibility for the conduct that caused Theranos to settle with the United States Justice Department and plead guilty to felony charges, I still think Theranos’ value and potential is enormous and we have a lot to offer clinicians and patients,” she wrote in an open letter to Theranos’ customers in May 2018.
Holmes also took to Medium to justify her actions, but many are still skeptical of her arguments and justifiably so.
“Her ability to appear remorseful is not based on reality. Her actions speak for themselves. And her historical record is not one of success,” tweeted Neil Paine, a researcher for Democracy Now!
But Holmes is determined to resurrect Theranos, despite the rather negative history the company has currently. She has personally posted to Facebook and social media to reassure investors she has the company’s best interests at heart.
In a 2015 letter to the company’s investors, Holmes wrote, “It is clear that in its early years Theranos operated with some accountability and integrity. We took our commitment to patient safety very seriously and built a lean, well-diversified organization that produced innovation that others wanted to copy. This is a lesson we will not repeat.”
But most evidence suggests that although Theranos did include some doctors into the company’s early program, that was not the same as conducting its own diagnostics.
“This is a company that was built on spin and it never should have gotten to where it was without ever working with physicians,” Roche attorney Jonathan Lipovetsky said.
The answer to whether Theranos will get back its footing will most likely be in the jury’s hands.
Perhaps a better time to close business on the Theranos case would have been months ago.
This article was republished from Individual Entrepreneur. Read the original article.