The verdict on Theranos founder and former CEO Elizabeth Holmes, who was tried for fraud in a U.S. court, was guilty. Theranos was a company set up by Holmes and her former partner Ramesh “Sunny” Balwani and had promised to revolutionize blood testing. Their advanced biotech equipment—they claimed—would provide results for a whole battery of tests with just a few drops of blood. In its heyday, Theranos was worth more than $9 billion, and Elizabeth Holmes was looked at as “the next Steve Jobs.” She was also the face that launched $724 million in stock sales to private equity firms and venture capitalists. Holmes figured in Time’s 2015 list of the 100 most influential people of the year and was feted by Wall Street as the “world’s youngest self-made female billionaire.”
The evidence presented during the trial showed that Theranos technology did not work, and Holmes, while fully aware of it, knowingly falsified the results and forged reports. These “doctored reports” showed that major pharmaceutical companies endorsed her products, and even the U.S. military was using Theranos equipment in the field.
Holmes got major names in the industry to invest almost a billion dollars in Theranos. The investors included the Walton family, who owns Walmart; Rupert Murdoch, the major media mogul; the family of Betsy DeVos, who was the former secretary of education under the Trump administration; Larry Ellison, the founder of Oracle; and many other people with deep pockets. Meanwhile, Theranos’ board of directors also had dazzling names including former U.S. secretaries of state Henry Kissinger and George Shultz and former U.S. secretaries of defense James Mattis and William Perry.
The people who invested in Theranos and sat on its board are a reflection of today’s stock market: it is dominated by trillions of dollars of private wealth, estimated by the Economist in 2018 to be in the range of $9 trillion.
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