Elizabeth Holmes Testimony Day 3: Live Trial Updates – The New York Times

Erin Woo

Nov. 23, 2021, 2:40 p.m. ET

Nov. 23, 2021, 2:40 p.m. ET

Court is back in session. Ms. Holmes tried to make eye contact with the jurors as they filed in, but only one juror appeared to look up.

Erin Griffith

Nov. 23, 2021, 2:32 p.m. ET

Nov. 23, 2021, 2:32 p.m. ET

San Jose, Calif.

The break is about to end and Ms. Holmes is chatting with the court reporter. Before the break, she had testified about the overheating problems caused by having too many Theranos devices packed together in one spot.

Erin Woo

Nov. 23, 2021, 2:30 p.m. ET

Nov. 23, 2021, 2:30 p.m. ET

Elizabeth Holmes believed.

That argument was a line of defense that Ms. Holmes, the founder of the blood testing start-up Theranos, brought up on Monday during testimony in her fraud trial. She argued, essentially, that she could not have deceived Theranos’s investors, patients and others about how well her company’s medical devices worked because she believed the technology to be real. After all, that was what her employees told her, she said.

On Tuesday, in her third day of testimony, Ms. Holmes further built up that defense.

During the proceedings, Kevin Downey, Ms. Holmes’s lawyer, brought up emails and presentations from senior Theranos scientists such as Ian Gibbons and Surekha Gangakhedkar in which they gave positive reports about the start-up’s devices. Ms. Holmes publicly claimed Theranos’s devices were revolutionary, but The Wall Street Journal exposed in 2015 that the machines didn’t work.

In one case, Mr. Downey displayed a February 2010 email from Mr. Gibbons to Ms. Holmes. Ms. Holmes had asked about various blood tests, and he responded, “Essentially all are possible in the proposed system.” She said that she took this to mean that these tests were being run on Theranos’s system.

In another case, Ms. Holmes emailed her scientists to ask them about a presentation they had prepared. When Mr. Downey asked why she had sent the email, she said, “Our scientists had said that, and so I wanted to better understand that statement.”

Mr. Downey also tried to show that Ms. Holmes had relied on outside experts and her board of directors. He brought up a study done by scientists at Johns Hopkins University that concluded that Theranos’s technology was “novel and sound.”

“Our team was really excited about this,” Ms. Holmes said. “This was some of the best laboratory experts in the world.”

Mr. Downey also pointed out that Theranos’s board in 2010 included Don Lucas, an investor who backed Oracle and Adobe; Pete Thomas, a longtime investor at the venture capital firm IVP; and Channing Robertson, a Stanford University professor.

One person Ms. Holmes hasn’t fully discussed is Ramesh Balwani, Theranos’s former chief operating officer and her former boyfriend, who is known as Sunny. In three days on the stand, she has mentioned his name only once, to note that he was involved in the Hopkins study.

But there also has been a dissonance in Ms. Holmes’s testimony. She has talked confidently about Theranos’s technology during her testimony, a contrast to how her lawyers have tried to argue that she depended on other people to tell her how the technology worked.

Kellen Browning

Nov. 23, 2021, 2:09 p.m. ET

Nov. 23, 2021, 2:09 p.m. ET

As she has defended herself in court, Elizabeth Holmes has made the arguments that longtime lawyers anticipated.

Ms. Holmes, the founder of the failed blood testing start-up Theranos, has sought to shift blame onto other Theranos employees with more technical skills. She has tried to poke holes in prosecutors’ arguments that she lied about working with drug companies. And, the lawyers said, she has tried to appear sympathetic and down to earth by showing up to court hand-in-hand with her mother and wearing clothing appropriate for a courtroom instead of the black turtlenecks she was once famous for wearing.

It’s all part of painting the picture, they said, of Ms. Holmes as a well-meaning but ultimately unsuccessful executive, rather than someone who intentionally misled investors and should be convicted of fraud.

“This is exactly what you would expect,” said Neama Rahmani, the president of the law firm West Coast Trial Lawyers and a former federal prosecutor. “Generally speaking, when you go into these types of cases, there’s two types of defenses: ‘I didn’t know’ and ‘It wasn’t me.’”

Ms. Holmes, 37, has been charged with 11 counts of fraud and conspiracy to commit fraud. She has pleaded not guilty. If convicted, she faces up to 20 years in prison.

Mr. Rahmani said that Ms. Holmes’s attempts to blame others for the company’s problems while emphasizing her own ignorance was typical of fraud defendants. He said the tactic was also often used in money laundering and drug trials — cases where prosecutors have to prove that a defendant knew they were transporting drugs or that money came from illicit activities.

In Ms. Holmes’s case, she and her team “are going to do everything they can to distance themselves from that knowledge,” he said.

Jeffrey Cohen, an associate professor at Boston College Law School and a former federal prosecutor, said attempts to make Ms. Holmes appear ignorant were part of a larger strategy.

“What I would expect a defendant in a high-profile case to do is try to humanize themselves and make the jury see that they’re not just a corporate C.E.O., but a person with the flaws that any person might have who’s running a large corporation,” Mr. Cohen said. He added that having Ms. Holmes’s mother in the room “says to the jury that she could be a sympathetic character and not this mastermind of a fraudulent scheme.”

As for Ms. Holmes’s attempts to rebut arguments made by the prosecution, such as by pointing to studies Theranos did with drug companies, Mr. Rahmani said it was likely an effort to create uncertainty about Ms. Holmes’s culpability.

“They’re trying to paint this much more nuanced picture, because obviously all they need to do is establish reasonable doubt. They’re hoping to pick off a few jurors,” he said. “If they get some folks who are sympathetic or some people who are on the fence, that’s their path to success here.”

Erin Griffith

Nov. 23, 2021, 1:57 p.m. ET

Nov. 23, 2021, 1:57 p.m. ET

San Jose, Calif.

We are taking our morning break. Back soon.

Erin Woo

Nov. 23, 2021, 1:55 p.m. ET

Nov. 23, 2021, 1:55 p.m. ET

Ms. Holmes’s testimony has shown an interesting tension between how confidently she talks about Theranos’s technology to the jurors, and how her defense is also trying to argue that she just relied on other people to tell her how it worked.

Erin Woo

Nov. 23, 2021, 1:45 p.m. ET

Nov. 23, 2021, 1:45 p.m. ET

Ms. Holmes seems to be making an effort to explain Theranos’s technology in a way that jurors can understand. She described the inner workings of one Theranos device, saying it had an internal “robot” and that “the device calls the cloud to say, ‘What do I do with that storage?’”

Erin Griffith

Nov. 23, 2021, 1:34 p.m. ET

Nov. 23, 2021, 1:34 p.m. ET

Elizabeth Holmes, the founder of the blood testing start-up Theranos, testified on Tuesday about her personal role in one of the prosecution’s most damning pieces of evidence in her fraud case — and tried to flip the narrative.

That piece of evidence is a set of validation reports that documented studies of Theranos’s technology done in partnership with pharmaceutical companies and displayed the logos of major drug companies, including Pfizer and Schering-Plough. Ms. Holmes sent these reports to investors and partners as part of her pitch to get them to invest in and do business with Theranos.

Investors and partners, including Wade Miquelon, the former chief financial officer of Walgreens, had previously testified that the outside endorsement had helped convince them to invest in and work with Theranos.

“My assumption was that both parties agreed to what was written,” Mr. Miquelon said of the Pfizer report. It was an important piece of diligence, he added, because “the pharmacy companies in general are much more adept at the lab work they do.”

But there was one problem, prosecutors said: The drug companies had not written or approved of the reports.

On Tuesday, Ms. Holmes said she had personally added the logos to the reports just before sending them Walgreens. But she said she had done so “because this work was done in partnership with those companies and I was trying to convey that.”

Ms. Holmes said she hadn’t meant to give the impression that the reports were prepared by the pharmaceutical companies.

“I’ve heard that testimony in this case, and I wish I’d done it differently,” she said.

Ms. Holmes’s lawyer, Kevin Downey, said Theranos had not hidden that it had added the logos from the pharmaceutical companies. In a bid to show that the companies may have been aware of the reports, he displayed a 2014 email from Ms. Holmes’s brother, Christian Holmes, who worked at Theranos, to various Pfizer executives. The email attached the report using Pfizer’s logo.

Erin Woo

Nov. 23, 2021, 1:22 p.m. ET

Nov. 23, 2021, 1:22 p.m. ET

Ms. Holmes said that Theranos called its formula for turning blood tests into small sample tests “Theranizing assays.” Her company had a patent for “Theranizing assays,” she testified.

Erin Woo

Nov. 23, 2021, 1:16 p.m. ET

Nov. 23, 2021, 1:16 p.m. ET

Ms. Holmes said that Daniel Young, not her, was in put in charge of the plan for launching in Walgreens stores.

“He is an incredibly smart person who had done great work on our informatics team,” she said. “He had skills sets in modeling and data and we wanted to apply them.”

Again, this goes to the argument that Ms. Holmes was surrounded by other, more qualified, people that she trusted to tell her how Theranos’s technology was doing.

Erin Woo

Nov. 23, 2021, 1:14 p.m. ET

Nov. 23, 2021, 1:14 p.m. ET

Ms. Holmes testified that Theranos devices were not included in Walgreens stores because Walgreens changed its mind.

Originally, Walgreens wanted Theranos devices in their stores, but the company decided it wanted to use a central lab because of “FDA and CMS reasons,” Ms. Holmes said, saying that Theranos lawyers had different opinions but ultimately agreed.

This required a change to their agreement.

Erin Woo

Nov. 23, 2021, 1:06 p.m. ET

Nov. 23, 2021, 1:06 p.m. ET

Mr. Downey asked who else was involved in the Johns Hopkins work. One of the people Ms. Holmes named: “Sunny Balwani.” 

This is the first time she has mentioned his name on the stand, three days into her testimony. Experts anticipated her testimony would focus on his role in the company as Theranos’s chief operating officer, as well as her boyfriend. Court filings indicated that she would argue he had abused her during their relationship, allegations Mr. Balwani has denied. But she has not mentioned that so far.

Erin Woo

Nov. 23, 2021, 1:04 p.m. ET

Nov. 23, 2021, 1:04 p.m. ET

Mr. Downey brought up a study done by Johns Hopkins experts for Walgreens that said Theranos’s technology was “novel and sound.” 

“Our team was really excited about this — this was some of the best laboratory experts in the world,” Ms. Holmes testified. She added: “Getting this kind of feedback was amazing.” 

The Hopkins study returns to the earlier line of argument that Ms. Holmes trusted outside expert reviews of Theranos’s technology.

Erin Woo

Nov. 23, 2021, 12:59 p.m. ET

Nov. 23, 2021, 12:59 p.m. ET

The prosecution has brought up these validation reports many times, but none of their witnesses were able to establish that Ms. Holmes had been personally involved in the creation of the reports. Tuesday’s testimony is the first time that that has been made clear to the jurors.

Erin Woo

Nov. 23, 2021, 12:55 p.m. ET

Nov. 23, 2021, 12:55 p.m. ET

Mr. Downey asked Ms. Holmes if she tried to conceal from Pfizer that she had added the logo to the top of the report.

She replied, “Not at all.”

Erin Woo

Nov. 23, 2021, 12:55 p.m. ET

Nov. 23, 2021, 12:55 p.m. ET

Ms. Holmes addressed the pharmaceutical reports that have been a focus of the prosecution’s argument. The reports bore the logos from the pharmaceutical companies Pfizer and Schering-Plough, and witnesses testified that they took that to mean the drug makers had prepared or approved the reports.

Ms. Holmes testified that she was the one to put the logos on the reports but said her intent was not to convey that the companies had approved the report.

“This work was done in partnership with these companies and I was trying to convey that,” she testified.

Mr. Downey asked if she knew that people took the logos to mean the companies had approved the report.

“No,” Ms. Holmes testified, looking directly at Mr. Downey shaking her head. “I’ve heard that testimony in this case and I wish I’d done it differently.”

Erin Woo

Nov. 23, 2021, 12:47 p.m. ET

Nov. 23, 2021, 12:47 p.m. ET

Ms. Holmes elaborated, commenting on a list that showed the studies that Theranos had done with various pharmaceutical companies. “What you can see here is there were all sorts of different parts of the technology that were evaluated and validated in those programs,” she said.

Erin Griffith

Nov. 23, 2021, 12:45 p.m. ET

Nov. 23, 2021, 12:45 p.m. ET

San Jose, Calif.

Ms. Holmes often claimed to investors that Theranos’s technology was “comprehensively validated” by 10 of the 15 largest drug companies in the world. Prosecutors argued that wasn’t true. Ms. Holmes just explained what she meant: “That our systems — the chemistries, cartridges devices software — had been tested against standards by these companies.”

Erin Woo

Nov. 23, 2021, 12:38 p.m. ET

Nov. 23, 2021, 12:38 p.m. ET

Ms. Holmes tried to recast why Theranos did not partner with pharmaceutical companies. 

She said that pharmaceutical companies validated the technology, but “we couldn’t get contracts that were big enough to grow the business fast enough.” 

Earlier, jurors heard scientists from Pfizer and Schering-Plough testify that they did not recommend Theranos’s technology.

Erin Griffith

Nov. 23, 2021, 12:38 p.m. ET

Nov. 23, 2021, 12:38 p.m. ET

San Jose, Calif.

Ms. Holmes gave some detailed technical descriptions of pictures of the machines used to develop Theranos’s technology. It was an attempt to bolster the defense’s case that Theranos did develop some real technology. In a way, the defense is making the same pitch to jurors that Ms. Holmes once made to investors.

David Streitfeld

Nov. 23, 2021, 12:35 p.m. ET

Nov. 23, 2021, 12:35 p.m. ET

Credit…Jim Wilson/The New York Times

The trial of Elizabeth Holmes has everything: a charismatic, attractive and youthful female defendant; celebrities; sex; vast sums of money; the long shadow of Steve Jobs; lives of real people at risk.

If it’s one of the most famous criminal cases ever to come out of Silicon Valley, it also sometimes seems like the only one. Prosecutors in Northern California brought 57 white-collar crime cases in fiscal year 2020. Even after accounting for the effect of Covid, cases have plunged from the peak of 350 in 1995.

Not every white-collar case is a tech case or related to start-ups, which means there are only a handful of times each year when someone in Silicon Valley is accused of a crime.

There are a lot of complicated reasons for this shortage of courtroom action.

A frequent explanation is that it is the fault of a lackluster U.S. attorney’s office in San Francisco. Few prosecutors come to the Bay Area to make their reputations, and those that do — like Robert Mueller 20 years ago — soon move on to better jobs. Mr. Mueller took over the F.B.I.

It’s not just a local issue. Fighting white-collar crime has been less of a priority for the Department of Justice since the Sept. 11 attacks brought fears of widespread terrorism.

And for all the growing awareness of the power of tech companies, there is little public demand to hold them accountable. When David Anderson stepped down as U.S. attorney for the Northern District of California early this year, he did an interview with a radio station. None of the questions from the host or from callers dealt with Silicon Valley.

Mr. Anderson, a Trump appointee, had talked about making Silicon Valley a priority for his prosecutors. His first public appearance was on a panel titled “White Collar Crime in a High-Tech World.” But he was in office for two years, too few to really make an impact. The district has had an acting U.S. attorney, Stephanie Hinds, since March.

Yet another reason is that Silicon Valley is a very rich place. That does not make government prosecutions impossible. But it ensures that top-flight defense attorneys can be brought in, making cases like Ms. Holmes’s neither short nor simple.

Finally, there is a sense in Silicon Valley that failure — whether a company that went under or an investment that was lost — is best kept in the family, far away from prosecutors, regulators and the media. Investors are supposed to be sophisticated, and a case like Ms. Holmes’s can reveal just how foolish and naïve they were. The same is true of employees.

Better to just forget about anything suspicious than allege fraudulent activity. After all, you wouldn’t want to miss out on the next opportunity.

Erin Woo

Nov. 23, 2021, 12:32 p.m. ET

Nov. 23, 2021, 12:32 p.m. ET

Mr. Downey asked, “Is it safe to say there was a lot of expertise on the board of directors in terms of the development of technologies in 2010?” He named Don Lucas, an investor who backed Oracle and Adobe and who was chairman of the board, Pete Thomas, a longtime investor at the venture capital firm IVP, and Channing Robertson, a Stanford University professor. 

Ms. Holmes replied: “There was.” 

Mr. Downey’s questions thus far seem angled at showing that Ms. Holmes was surrounded by experienced supporters. However, Theranos’s board in later years was noteworthy because of the concentration of directors like former defense secretary James Mattis, who brought star power but little to no expertise in medical device technology.

Erin Griffith

Nov. 23, 2021, 12:30 p.m. ET

Nov. 23, 2021, 12:30 p.m. ET

San Jose, Calif.

Ms. Holmes’s answers have often employed a blend of corporate, business and science jargon. When asked about what Theranos needed to do as it developed blood tests, she described taking “our formula for the chemistry methods” and applying it to a “test list” that would then be applied to various areas for retail use.

Erin Woo

Nov. 23, 2021, 12:21 p.m. ET

Nov. 23, 2021, 12:21 p.m. ET

Mr. Downey brought up an October 2010 email from Ms. Holmes in which she asked her scientists about a presentation they had prepared. She asked about the capabilities of Theranos’s blood tests and whether they were at least as good as alternatives, and why and how Theranos would achieve significant cost savings, and why and how Theranos would accelerate studies. 

When Mr. Downey asked Ms. Holmes about her understanding of Theranos’s technology, she testified: “Our scientists had said that, and so I wanted to better understand that statement.”

Erin Woo

Nov. 23, 2021, 12:15 p.m. ET

Nov. 23, 2021, 12:15 p.m. ET

Mr. Downey brought up a February 2010 email from Ian Gibbons, Theranos’s chief scientist at the time. He wrote: “Essentially all are possible in the proposed system” about some tests Ms. Holmes asked about. She testified that she took this to mean that these tests were being run on Theranos’s system.

A key argument for the defense is that Ms. Holmes, who dropped out of Stanford during her sophomore year, believed what her scientists were telling her about Theranos’s technology and thought that the tests worked.

Erin Griffith

Nov. 23, 2021, 12:14 p.m. ET

Nov. 23, 2021, 12:14 p.m. ET

San Jose, Calif.

Kevin Downey, Ms. Holmes’s lawyer, tried to rebut prior testimony from Shane Weber, a Pfizer executive who said that he evaluated Theranos’s technology around 2009. Mr. Weber had concluded that Theranos’s answers to his technical questions were “non-informative, tangential, deflective or evasive” and that Pfizer should stop working with the company.

Ms. Holmes just testified that she met with other executives at Pfizer after Mr. Weber’s conclusions, to try to show that her representations to investors that the drug maker had validated Theranos’s technology were not completely baseless.

Credit…Jim Wilson/The New York Times
Erin Woo

Nov. 23, 2021, 12:10 p.m. ET

Nov. 23, 2021, 12:10 p.m. ET

Ms. Holmes has picked up her testimony where she left off on Monday, discussing Theranos’s conversations with pharmaceutical companies and the feedback Theranos scientists gave her on the devices that the company was developing.

Erin Woo

Nov. 23, 2021, 12:05 p.m. ET

Nov. 23, 2021, 12:05 p.m. ET

White-collar defendants rarely take the stand because it opens them up to a potentially damaging cross-examination. Yet Elizabeth Holmes is testifying in her own defense.

Why take that chance?

Lawyers for Ms. Holmes, 37, may be betting that their client — who charmed investors and partners as she built Theranos to a $9 billion valuation before it collapsed — will be persuasive and charismatic enough to get 12 jurors on her side.

“They think they are behind, and they have a smart, likable, young, attractive witness,” said Neama Rahmani, who is the president of the West Coast Trial Lawyers and a former federal prosecutor. “And she thinks she’s going to talk her way out of it.”

Ms. Holmes’s testimony may also be the only way to show that she did not intend to deceive anyone, Mr. Rahmani said. She can speak about her relationship with Ramesh “Sunny” Balwani, 55, Theranos’s former chief operating officer and her former boyfriend. In court filings, she has said he was emotionally abusive and controlling. He has denied the allegations.

Ms. Holmes may also be hoping to present herself to the jury as a sympathetic figure. She had a baby in July and has showed up to the courtroom carrying a diaper bag and holding hands with her mother.

But by speaking in court, Ms. Holmes is taking a risk. That’s because she has previously made many statements about Theranos — both under oath and in media interviews — which prosecutors can grill her on.

“She’s going to be the best witness for herself, or the worst,” Mr. Rahmani said. “She may just kind of hang herself, so we’ll see.”

Erin Woo

Nov. 23, 2021, 12:03 p.m. ET

Nov. 23, 2021, 12:03 p.m. ET

The jury has filed in, and Ms. Holmes is on the stand. Unlike yesterday, when there was an unexplained delay lasting nearly two hours, trial is beginning on time today.

Erin Griffith

Nov. 23, 2021, 11:58 a.m. ET

Nov. 23, 2021, 11:58 a.m. ET

San Jose, Calif.

Ms. Holmes has a full coterie of friends and family here in the courtroom supporting her, including her mother, Noel, and her partner, Billy Evans, as well as a half-dozen others.

Erin Woo

Nov. 23, 2021, 11:57 a.m. ET

Nov. 23, 2021, 11:57 a.m. ET

Credit…Jim Wilson/The New York Times

The testimony of Elizabeth Holmes, the founder of the blood testing start-up Theranos, has raised a renewed flurry of public interest in her fraud trial. And that has meant a more colorful scene outside the Robert F. Peckham Federal Courthouse in San Jose, Calif., where the trial is taking place.

Since it became clear that Ms. Holmes would take the stand this week, spectators and media began queuing outside the courthouse before 3 a.m. on Monday and Tuesday, shivering and burrowing into coats in the pre-dawn cold. The trial is not being broadcast and the only way to view the proceedings is to be in the courtroom or in an overflow room. Before Ms. Holmes’s testimony, people had arrived later to line up to get into the trial.

On Tuesday, Danielle Baskin, a spectator, also brought black turtlenecks, blond wigs and red lipsticks — a nod to Ms. Holmes’s signature look when she ran Theranos — as well as energy drinks with the handmade labels “Badder Blood,” “Bitter Blood” and “Better Blood.” She set up shop outside the courthouse before a security guard told her she couldn’t sell goods on federal property.

Credit…Erin Woo/The New York Times

“I’m interested in the theatrics of how she bends words and shifts energy and how she crafts a story,” Ms. Baskin, 33, who drove from San Francisco with two friends, said of Ms. Holmes.

Ms. Baskin said she was the founder of Dialup, a voice chat app, and added that she was not a fan of Ms. Holmes. “I don’t have sympathy for her because she was lying the whole time, and I know women with brilliant ideas who can’t put on an act and fail at fund-raising,” she said. “She’s an example of why the system was broken.”

Emily Saul, a reporter for the podcast studio 3uncanny4, has become the unofficial keeper of the line, noting everyone who arrives and standing on a bench inside the courtyard once the gates open to corral people.

On Monday, the first person arrived at 12:15 a.m., saving a spot for a friend of the Holmes family who “preferred to be anonymous.” At 3:45 a.m., two blond women known as “Holmies,” who had dressed in black turtlenecks during opening statements in September, arrived dressed in different clothing. They hugged Ms. Holmes and her boyfriend, Billy Evans, and sat in the row reserved for the defense.

On Tuesday, spectators included a high school student and her mother from Palo Alto, Calif. Their presence led to a wave of laughter when “Karrie and Karrie’s mom” were announced in line.

At 5 a.m., the Starbucks around the corner opened. People left the line and returned clutching red holiday cups and paper bags with bagels or breakfast sandwiches. When the courthouse gates opened around 6:15 a.m., more than 50 people were in line. Only 34 fit in the courtroom. At 7:30 a.m., the doors to the courthouse opened.

Ms. Holmes arrived around 8:15 a.m., flanked by Mr. Evans and her mother and surrounded by cameras and microphones.

“God bless you, girl boss!” one person called as she entered the courthouse.

Erin Griffith

Nov. 23, 2021, 11:54 a.m. ET

Nov. 23, 2021, 11:54 a.m. ET

San Jose, Calif.

Hello again from the courtroom. The lawyers are all seated at their tables ready to go. Yesterday they had nearly two hours of private discussion in the judge’s chambers, delaying proceedings. Ms. Holmes has not yet taken her seat.

Nov. 22, 2021, 5:26 p.m. ET

Nov. 22, 2021, 5:26 p.m. ET

Credit…Jim Wilson/The New York Times

[Follow live news coverage on the trial of Elizabeth Holmes.]

SAN JOSE, Calif. — After weathering months of accusations that she lied to get money for her blood testing start-up, Theranos, Elizabeth Holmes, the embattled Silicon Valley entrepreneur who is on trial for fraud, sharpened her defense on Monday.

In just under two hours of testimony, Ms. Holmes pushed back against accusations that she had lied about Theranos’s work with drug companies. She also pointed the blame at the scientists and doctors who had worked at her start-up, saying she believed what they had told her about Theranos’s technology.

And throughout it all, Ms. Holmes’s defense bolstered the idea it has been pushing since the start of the trial: She may have made mistakes, but failure is not a crime.

“We thought this was a really big idea,” Ms. Holmes said about Theranos’s machines, which she once promised could run a long list of medical tests from just a few drops of their blood.

It was her second day of testimony in a trial that has gripped Silicon Valley and become a referendum on start-up culture and just how far entrepreneurs will take their hubristic claims of changing the world. For her lawyers, the idea on Monday was to show the kernel of truth that may have existed in some of the most blatant misrepresentations that prosecutors attributed to her.

Ms. Holmes, 37, has been charged with 11 counts of fraud and conspiracy to commit fraud. She has pleaded not guilty. If convicted, she faces up to 20 years in prison.

Her testimony has been the star attraction at a trial where more than 30 witnesses have been called over the past three months into a San Jose, Calif., courtroom to testify. Ms. Holmes had watched the proceedings quietly, her expression obscured behind a medical mask. On Friday, the prosecution had rested its case.

Ms. Holmes is the rare Silicon Valley executive to be tried on fraud charges. While the world of tech start-ups is known for its culture of hustle and hype, few have risen as high or fallen as dramatically as Theranos — and even fewer of their leaders have been indicted on accusations that they lied to investors. Over 13 years, Theranos raised nearly $1 billion in funding, valuing it at $9 billion. After The Wall Street Journal revealed in 2015 that Theranos’s technology did not work as advertised, the company unraveled. It shut down in 2018.

Ms. Holmes’s decision to testify is a risky one that shocked the courtroom out of its Friday afternoon lull last week. She has opened herself up to cross-examination by prosecutors and also risks perjury.

But experts have argued that she had no choice but to defend herself, given the evidence presented by prosecutors. That has included text messages that showed Ms. Holmes was aware of Theranos’s technology problems and testimony about faked demonstrations of its abilities. Prosecutors also revealed that after an employee, Erika Cheung, spoke to regulators about problems in the Theranos lab, the start-up hired a private detective to follow her.

“They think they are behind, and they have a smart, likable, young, attractive witness,” Neama Rahmani, the president of the West Coast Trial Lawyers and a former federal prosecutor, said of Ms. Holmes. “And she thinks she’s going to talk her way out of it.”

One key point made by prosecutors was that Theranos could never conduct more than 12 different blood tests on its own machines. It secretly used blood analysis machines from companies like Siemens to run most of its tests, but proclaimed it could do hundreds or thousands at various times.

Ms. Holmes’s lawyers have for weeks tried complicating the prosecution’s narrative. They have pointed to patents created by Theranos. They have hammered investors for not doing enough diligence on the start-up before eagerly writing checks to fund it. And they painted Ms. Holmes as inexperienced and unqualified to run a lab, directing blame for Theranos’s failure at those who were experienced and qualified.

But on the stand, Ms. Holmes presented herself as an impressive and ambitious chief executive when describing the early days of Theranos. She detailed a patent that bore her name for an early concept of the company, as well as the help she got from Channing Robertson, a respected scientist and Stanford University professor who joined Theranos’s board. She was relaxed and confident, smiling widely and nodding before answering questions.

On Monday, her direct examination continued in chronological order. Her lawyers walked through the details of preliminary studies that Theranos had done with a number of drug companies in 2008, 2009 and 2010. They also noted that Theranos’s technology had performed well in those early studies with Merck, AstraZeneca, Centocor, Bristol Myers Squibb and others.

Representatives from Pfizer and Schering-Plough testified earlier that they had evaluated Theranos’s technology and had come away unimpressed.

But the point of Monday’s testimony was to show that Theranos did work with drug companies rather than not at all. Ms. Holmes testified not only about the clinical studies but also about a study published in a peer-reviewed journal.

That strategy allowed her to focus on Theranos’s early successes and the conversations she had with each potential partner, while glossing over the outcomes of those conversations.

Ms. Holmes also tried to shift the blame, noting that she learned about Theranos’s technology from the scientists and doctors who worked in the company’s lab. She testified that she believed them when they said the technology worked. The implication: Ms. Holmes could not have intended to deceive investors if she believed the technology was real.

Prosecutors face a challenge in proving that Ms. Holmes intended to defraud investors. The push-pull between showing that she was aware of Theranos’s problems and that she simply relied on what others told her has been a recurring theme in testimony.

Emails between Ms. Holmes and Ian Gibbons, a former chief scientist at Theranos, also painted a rosy picture of Theranos’s technology.

“I understood that the four series could do any blood test,” Ms. Holmes said, referring to a version of Theranos’s machines, described by Mr. Gibbons.

Judge Edward J. Davila of U.S. District Court for the Northern District of California instructed jurors that many exhibits, including the emails between Ms. Holmes and her lab workers, should be taken as an indication of her “state of mind” rather than the truth of the situation.

Monday’s court session ended with Judge Davila again rebuking spectators over the volume of their typing, reminders of the many interruptions and delays that have plagued the trial since it began in August.

Direct testimony of Ms. Holmes is expected to last through Tuesday. She will then face cross-examination from prosecutors.

Erin Woo

Nov. 22, 2021, 11:43 a.m. ET

Nov. 22, 2021, 11:43 a.m. ET

The government’s case against Elizabeth Holmes, the founder of Theranos, featured several key pieces of evidence that showed she intentionally deceived doctors, patients and investors in the blood testing start-up.

They included:

A fraudulent report

In 2010, Theranos created a 55-page report that prominently displayed the logos of the pharmaceutical companies Pfizer, Schering-Plough and GlaxoSmithKline. Investors such as Lisa Peterson, who manages investments for the wealthy DeVos family, and Walter Mosley, whose clients include the Walton family, testified that the report had helped persuade them to invest in Theranos.

The problem? Pfizer, Schering-Plough and GlaxoSmithKline had not prepared or signed off on the report. While prosecutors did not establish that Ms. Holmes created the report, witnesses like Daniel Edlin, a former Theranos senior product manager, testified that she had signed off on all investor material.

An investor letter

Theranos spent years discussing with the Department of Defense the possible deployment of its technology in the battlefield, but no partnership materialized.

Yet Ms. Holmes told potential investors in a letter that Theranos had signed contracts with the U.S. military — claims that helped persuade them to invest, the investors testified.

“We really relied on the fact that they had been doing work for pharma companies and the government for years,” Ms. Peterson said.

Internal emails

Emails between Theranos employees made up the bulk of the prosecution’s exhibits. Some of the emails showed when Theranos hid device failures, removed abnormal results from test reports and fudged demonstrations of its blood testing.

In one case, Mr. Edlin asked a colleague for advice on how to demonstrate Theranos’s technology for potential investors.

Michael Craig, a Theranos software engineer, recommended that Mr. Edlin use the demo app, a special setting on Theranos’s devices that said “running” or “processing” if an error had taken place, rather than display the mistake.

The app would hide failures from the client, Mr. Craig wrote in an email.

“Never a bad thing,” Mr. Edlin replied. “Let’s go with demo, thanks.”

Erin Woo

Nov. 22, 2021, 11:31 a.m. ET

Nov. 22, 2021, 11:31 a.m. ET

Credit…David Paul Morris/Bloomberg, via Getty Images

From the start, prosecutors have argued that Elizabeth Holmes intentionally deceived investors, doctors and patients as she sought investments and partnerships for Theranos, her once highflying blood testing start-up.

In opening statements on Sept. 8, Robert Leach, the assistant U.S. attorney who is the lead prosecutor in the case, laid out the government’s central thesis: that Ms. Holmes courted investors and commercial partners with false claims about her company’s technology and its relationships with pharmaceutical companies and the military.

“Out of time and out of money, Elizabeth Holmes decided to lie,” he repeatedly declared.

To make that case, prosecutors called 29 witnesses to the stand. They included eight former Theranos employees, six investors, three commercial partners, two doctors and three patients. From a star-studded list of nearly 200 people the government had listed as potential witnesses, the highest-profile person to appear was former Defense Secretary James Mattis, who had served on Theranos’s board.

Prosecutors presented evidence to show that Ms. Holmes perpetrated deceit, including that she knew of technology demonstrations that hid Theranos’s failures and was aware the company made false claims of working with the military. They also showed that Theranos had used a report with a pharmaceutical company’s logo to imply it had that company’s backing, even though the firm had not signed off on the report. Investors and partners testified that those claims had helped persuade them to give Theranos their business and money.

The prosecution also detailed the dysfunction within Theranos’s lab, which handled the blood tests. Theranos had trumpeted its claim that its tests could discern various illnesses in patients with just a drop of blood.

But Adam Rosendorff, one of Theranos’s former lab directors, spent six days on the stand explaining that the tests repeatedly produced inaccurate and irregular results. Other lab directors testified that they had essentially been figureheads; one spent just five to 10 hours at Theranos over his tenure.

Daniel Edlin, a former senior product manager and Holmes family friend, testified that Ms. Holmes had signed off on Theranos’s marketing and investor materials. He also said Ramesh Balwani, the chief operating officer and Ms. Holmes’s onetime boyfriend, who is known as Sunny, had deferred to her when the two of them disagreed.

“Generally, she was the C.E.O., so she had the final decision-making authority,” Mr. Edlin said.

Erin Griffith

Nov. 22, 2021, 11:00 a.m. ET

Nov. 22, 2021, 11:00 a.m. ET

Credit…Jim Wilson/The New York Times

In 2018, the United States charged Elizabeth Holmes and her business partner, Ramesh “Sunny” Balwani, with nine counts of wire fraud and two counts of conspiracy to commit wire fraud.

The indictment accuses the pair of engaging in a “scheme, plan and artifice to defraud investors as to a material matter.”

In other words, they are accused of lying about Theranos’s business and technology to get money. The lies outlined in the indictment include claims Theranos made about its relationship with the military and the status of its partnership with Walgreens. Prosecutors also say that Theranos faked demonstrations of its technology and falsified validation reports from pharmaceutical companies and the financial health of its business.

Wire fraud is a felony that carries a maximum penalty of 20 years and potential fines. Theranos also paid a $500,000 fine to settle civil securities fraud charges with the Securities and Exchange Commission in 2018. It also settled multiple lawsuits with investors and partners before dissolving that year.

Since the criminal indictment, the cases of Ms. Holmes and Mr. Balwani have been separated. Mr. Balwani faces trial next year. Further, some of the charges against Ms. Holmes have been dropped and others added. As of today, Ms. Holmes faces 11 counts of fraud and conspiracy to commit fraud.

She has pleaded not guilty.

Erin Woo

Nov. 19, 2021, 6:31 p.m. ET

Nov. 19, 2021, 6:31 p.m. ET

Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, surrounded herself with a constellation of moguls, four-star generals, venture capitalists and others during her time running the company. Ultimately, Theranos was undone after whistle-blowers who were concerned that the company was lying about its technology spoke to the media and to regulators.

Here are some of the central figures in the rise and fall of Theranos and Ms. Holmes’s fraud trial.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo

Erin Woo📍Reporting from San Jose, Calif.

Who’s Who in the Elizabeth Holmes Trial

Erin Woo

Erin Woo📍Reporting from San Jose, Calif.

Carlos Chavarria for The New York Times

Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and nine counts of wire fraud.

Here are some of the key figures in the case →

Nov. 15, 2021

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Erin Woo

Nov. 19, 2021, 6:13 p.m. ET

Nov. 19, 2021, 6:13 p.m. ET

Credit…Carlos Chavarria for The New York Times

It’s Silicon Valley’s trial of the decade.

Since opening statements began on Sept. 8, Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, has been standing trial in federal court in San Jose, Calif., for 11 counts of fraud (a 12th count was removed). If convicted, she faces up to 20 years in prison. She has pleaded not guilty.

Her case has captivated the public — and spawned books, documentaries and even a fan club for Ms. Holmes, 37 — because she was a young female entrepreneur in heavily male Silicon Valley and because she appeared to push the boundaries of start-up culture and hubris to the limit.

Her story initially seemed like the stuff dreams are made of. Ms. Holmes dropped out of Stanford University at 19 and founded Theranos, which promised to decipher people’s health problems with just a drop of their blood. The company raised $945 million from famous venture capitalists and from powerful tech and media moguls such as Larry Ellison and Rupert Murdoch. At its peak, Theranos was valued at $9 billion. Ms. Holmes was lauded as one of the youngest self-made female billionaires.

But it all came crashing down after a 2015 investigation from The Wall Street Journal found that Theranos’s blood-testing technology didn’t work. Theranos shut down in 2018.

Now Ms. Holmes is on trial over a central issue: Did she intentionally mislead doctors, patients and investors as she sought investments and partnerships?

The prosecution spent weeks arguing that Ms. Holmes purposely deceived investors and others while knowing that Theranos’s blood tests were often inaccurate and that the company relied on third-party commercial machines. In opening statements, Ms. Holmes’s lawyers asserted that she was simply a hardworking entrepreneur whose failure to achieve lofty aims did not constitute a crime.

Ms. Holmes vocally defended herself in the media after The Wall Street Journal’s revelations about Theranos. She has continued that stance during her testimony in court. The jusry and the public will also be eager to hear whether she points fingers at others, such as her former business and romantic partner, Ramesh Balwani, who is known as Sunny.

The trial has played out inside a courtroom presided over by Judge Edward J. Davila of the U.S. District Court for the Northern District of California, with no live broadcast of the proceedings. Jury selection began on Aug. 31 and the case is scheduled to finish on Dec. 10.

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