- Back off.
- [Shelby] In the high profile trial
of Theranos founder, Elizabeth Holmes,
prosecutors have been trying to prove that Holmes
intentionally defrauded patients and investors
by making false claims
about her company's blood testing technology.
Holmes has pleaded not guilty.
- [Elizabeth] This company is about being able
to change the healthcare industry.
- As prosecutors continue to make their case,
speculation has grown about whether Holmes
will take the stand.
- The witnesses we've heard from have said
how they were totally enamored by her.
They totally believed her.
She had presence that controlled the room.
- [Shelby] To catch you up on three key pieces
of evidence presented at trial so far,
and a look at what's to come,
we talked to Wall Street Journal reporter,
Sara Randazzo, who's been covering the trial in California.
First, audio recordings have given jurors
the chance to hear Holmes pitch Theraons
to investors in 2013.
- [Elizabeth] The ability to take a technology like this
and put it in place, specifically on a medivac,
has the potential to change survival rates.
- We're hearing Elizabeth Holmes touting
how they can do all of these things with the machines,
how they're working with the military
and the military is huge for them.
And so all of these things that at this point,
the jurors have heard, it contained a lot of falsehoods
and weren't quite true.
And so now they're hearing Elizabeth Holmes' state directly,
which is pretty powerful.
- Some investors that said Holmes' promise
to help members of the military compelled them
to invest in the company.
In cross-examination, attorneys for Holmes
have made the case that Theranos investors
should have asked questions if they had concerns.
And that they knew investing
in a new type of technology,
like the kind of Theranos was developing, came with risks.
Prosecutors also read private text messages
between Holmes and her former boyfriend,
Sunny Balwani, who was the number two at the company.
- There's a lot of texts showing Sunny and Elizabeth
texting about concerns or things
that they're worried about.
- In one 2015 message, following media appearances
made by Holmes, Balwani wrote,
"FYI, I am worried about overexposure
without solid substance, which is lacking right now."
Holmes responded that the media coverage
helped Theranos get a business deal.
- It's important because a big part of this trial
is showing Elizabeth Holmes' intent
and that she intended to deceive.
So if jurors can come to believe
that she thought there were a bunch of concerns,
but then publicly was saying nothing was wrong,
that can help them in their deliberations.
- [Shelby] The defense has argued that Holmes
relied on Balwani for accurate information
about the company and that she believes
she was telling the truth about Theranos.
Balwani, who faces his own separate trial,
has denied any wrong doing.
Another key piece of evidence shown by the prosecution,
an allegedly forged endorsement.
This document, emblazoned with the Pfizer logo,
purported to show that Theranos' technology
had been validated by the pharmaceutical giant,
but prosecutors say it was used to deceive investors.
- What's come out is that they did work with Pfizer
in the very early years of the company.
Pfizer then had a scientist, Shane Weber,
analyze everything that they'd seen
and internally write a report that concluded
they didn't want to pursue the relationship.
- [Shelby] Weber said he himself told Holmes
that Pfizer wasn't interested in working with Theranos.
But about a year later,
Theranos put out a report with the Pfizer logo on it,
which Holmes use to pitch to investors.
Some investors testified that they took the report
at face value and that it played into their decision
to invest many millions of dollars.
Of course, there's been plenty of other evidence
presented at trial so far,
which you can read more about at wsj.com.
(soft music)
So what's next in the closely watched trial?
The defense will soon have a chance to make its case,
and it could go a few different ways.
As lawyer suggested in a court filing,
they could argue that Holmes was in an abusive relationship
with Balwani that left her under his control.
A lawyer for Balwani disputed any allegations of abuse.
Or as the defense argued in opening statements,
it could continue making the case that Holmes
simply had a startup that failed,
like many others in Silicon Valley.
The defense could also simply rest
hoping that prosecutors didn't prove Holmes' guilt
beyond a reasonable doubt.
- I think it's gonna be a bit of a surprise
and shock moment in court when they stand up and say,
whether they're calling someone or just resting the case.
- Holmes is facing 12 counts of wire fraud
and conspiracy to commit wire fraud
with the top charges carrying
a maximum federal prison sentence of 20 years.