Elizabeth Homes, the former CEO and founder of Theranos, has been found guilty on charges of wire fraud and conspiracy to commit wire fraud. Holmes faces up to 20 years in prison for defrauding investors in her blood testing startup. The verdict comes after a months-long trial, and more than three years after she was first charged and forced to step down as CEO in 2018.
Of the 11 total charges, Holmes was found guilty on four: conspiracy to defraud investors and three counts of wire fraud against individual investors. She was found not guilty on four additional charges, including one count of conspiracy to defraud patients, two counts of fraud against investors, and one count of wire fraud stemming from ads Theranos ran in Arizona. The jury was deadlocked on three other counts of wire fraud and returned no verdict on those charges.
During the trial, Holmes’ lawyers tried to portray her as a young and inexperienced entrepreneur. “Elizabeth Holmes worked herself to the bone for 15 years trying to make lab testing more affordable,” one of Holmes’ attorneys said in opening arguments. “She failed … but failure is not a crime.”
It took a jury seven full days to conclude that Theranos Inc. founder Elizabeth Holmes was guilty of four counts of fraud after a three-month trial. The startup world had been watching in suspense, but it was largely for the spectacle of it all — not because anyone thought the verdict would significantly change behavior in venture capital fundraising. Holmes was convicted of defrauding investors in the blood-testing startup of hundreds of millions of dollars, which should spur investors to scrutinize their portfolio companies more carefully, especially in the specialized world of healthcare. And the guilty verdict suggests founders should beware of their optimism slipping into dishonest exaggeration. But in a red-hot startup investing market, no one’s willing to slow down.
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