Tuesday, August 31, 2021
Fallen billionaire
Star founder Holmes faces long imprisonment
She has long been one of the biggest stars in Silicon Valley, a billionaire in her mid-twenties and is considered a revolutionary in the healthcare industry. But the technology of Elizabeth Holmes and her company Theranos doesn’t work at all. Now she is on trial as a suspected fraudster.
Elizabeth Holmes wanted to revolutionize the pharmaceutical and health industry with her blood test company Theranos – but the promise turned out to be a big bluff. Now the 37-year-old is on trial for fraud allegations. This Tuesday, the trial of the ex-star entrepreneur, who once made it onto the front pages of the US business papers as the great innovation hope of the tech stronghold Silicon Valley, begins in San Jose. If convicted, she could face up to 20 years in prison.
Holmes had left the US elite Stanford University in 2003 at the age of only 19 to found Theranos. The start-up promised to simplify blood tests with a revolutionary technology in which only a few drops are sufficient for samples. Investors were enthusiastic, at times Theranos was valued at around nine billion dollars. Holmes was worth around $ 4.5 billion, at least on paper. The company’s founder has been featured on magazine covers and conferences as a successful self-made billionaire.
Secretly worked with Siemens devices
But the steep ascent was followed by a spectacular crash: in 2015, an investigative report by the “Wall Street Journal” raised considerable doubts about Theranos’ technology. Even if Holmes initially stubbornly denied all allegations, her house of cards continued to falter. A series of other revelatory articles finally exposed the supposed success story as a hoax. In fact, the alleged innovations from Theranos did not work; instead, the company apparently secretly used conventional test procedures, for example with devices from Siemens.
The fraud charges followed in 2018. The US law enforcement officers accuse Holmes and her former business partner, lover and Theranos’ top manager Ramesh “Sunny” Balwani of having fooled investors and patients. The investigators accuse them, among other things, of having collected more than $ 150 million from donors under false pretenses.
Both Holmes and Balwani, who is due to be tried in early 2022, plead not guilty. The proceedings against Holmes are likely to drag on for months and begin quite unspectacularly with formalities such as the jury selection.
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