Theranos founder convicted of fraud

Theranos founder Elizabeth Holmes has been convicted of defrauding investors after a months-long landmark trial in California. Prosecutors said Holmes knowingly lied about technology she said could detect diseases with a few drops of blood. Jurors found Holmes guilty of four charges, including conspiracy to commit fraud against investors and three counts of wire fraud. She denied the charges, which carry a maximum prison term of 20 years each.

Holmes was not taken into custody, with no date confirmed yet for sentencing and a further hearing scheduled next week. She faced 11 charges in total and was found not guilty of four charges relating to defrauding the public. The split verdict came after the judge said the jury, having deliberated for seven days, could deliver a partial verdict after being unable to reach consensus on another three counts. Theranos, at one point valued at $9bn (£6.5bn), was once the darling of Silicon Valley.

The firm promised it would revolutionise the healthcare industry, but its claims began to unravel in 2015 after a Wall Street Journal investigation reported that its core blood-testing technology did not work. For nearly four months at trial, the jury of eight men and four women were presented with two starkly different accounts of the former self-made billionaire, whose downfall shook Silicon Valley. Calling some 30 witnesses, the prosecution sought to prove that Ms Holmes knew the product she was selling to investors was a sham, but remained hell-bent on the firm's success.

At trial, multiple lab directors testified they told Holmes about the flaws in Theranos' technology but were instructed to downplay their concerns. At the same time, they said, Holmes told investors the technology was operating as planned. Holmes "chose fraud over business failure. She chose to be dishonest with investors and patients", said prosecutor Jeff Schenk in closing arguments. "That choice was not only callous, it was criminal."

The defence countered with descriptions of a dedicated and driven businesswoman, making waves in a male-dominated industry. Testifying in her own defence, Holmes acknowledged mistakes in Theranos' operation, but maintained she never knowingly defrauded patients or investors. The defence also laid blame on Ramesh "Sunny" Balwani, Holmes' former business partner and long-term boyfriend.

Holmes has accused Mr Balwani, 19 years her senior, of emotional and sexual abuse - allegations he denies. Their decade-long relationship came to an end around the same time he stepped down as CEO in May 2016. He faces a separate trial next month. Holmes founded Theranos as a teenager, shortly after dropping out of chemical engineering at Stanford University. She was able to raise more than $900m from billionaires such as media magnate Rupert Murdoch and tech mogul Larry Ellison. The firm officially ceased operations in 2018 following the scandal.