The fraud trial of Theranos founder Elizabeth Holmes kicked off Tuesday with jury selection, casting a spotlight on the fallen Silicon Valley star. Holmes, a Stanford dropout who was once compared to Steve Jobs, faces felony charges alleging she duped elite financial backers, customers and patients into believing that her startup was about to revolutionize medicine.
Theranos’ technology promised to run hundreds of medical tests using a single drop of blood, but it never lived up to expectations — and may never have worked at all.
Once a jury is seated, the trial will begin in San Jose, California, with opening arguments scheduled early next week.
“The next Steve Jobs”
Holmes launched Theranos after dropping out of Stanford University in 2003. The startup, whose name derives from the words “therapy” and “diagnosis,” quickly achived billion-dollar valuations. Business magazines hailed the similarities between Holmes and Apple co-founder Steve Jobs, whom she embraced as a role model. At one point, her fortune of $4.5 billion, tied to her personal stake in the company, gained her accolades as the youngest self-made female billionaire.
But Theranos quickly lost steam after revelations that its supposedly breakthrough blood-testing machine, called “Edison,” didn’t work as Holmes had described and produced dangerously inaccurate results in tests run for actual patients.
Holmes now faces the prospect of being remembered more like Bernie Madoff, the once-revered New York financier whose name became synonymous with fraud after he pled guilty to bilking billions of dollars through an illegal Ponzi scheme.
Holmes and Theranos’ chief operating officer, Ramesh “Sunny” Balwani, are accused of orchestrating a multi-billion-dollar scheme to defraud investors and to defraud doctors and patients who paid for the company’s blood testing services. The two are being tried in separate trials, and both have pleaded not guilty.