Hulu’s The Dropout—the dramatized telling of Theranos CEO Elizabeth Holmes’ rise and fall from startup grace—begins with a deposition Holmes gave to the Securities and Exchange Commission (SEC) in 2017. The deposition is used throughout the first three episodes of the series, framing events from when Holmes first built her biomedical tech company and recruited employees and partners, to when she ultimately began fabricating results in front of investors. The video footage in the series shows lead actor Amanda Seyfried as Holmes, though the deposition was real, and so is the existence of the footage.
At the time, Holmes was under investigation by the SEC, the government agency responsible for enforcing laws to prevent market manipulation. (In a year, Holmes would be indicted on fraud charges, the trial for which has only recently been concluded). Over the course of three days, Holmes answered questions in a recorded deposition. She was asked about what she had told investors about her company’s technology and its finances.
Ultimately, Holmes paid a fine of $500,000. She was not forced to admit or deny the allegations. Still, she would make statements that would later prove damaging. When asked if she had signed the Walgreens contracts—the partnership between Theranos and the pharmacy company, which put Theranos technology in its stores—Holmes said she had. “I did. I signed many of the Walgreens agreements. I don’t know if I signed all of them. And yes. I mean, I’m the CEO. I’m the ultimate decision maker for the company.”
Holmes defense during her later trial would attempt to argue that she was not at the wheel during much of its fraudulent activity. The defense would claim Ramesh “Sunny” Balwani, Holmes’ romantic and professional partner, steered the company.
But in this 2017 deposition, Holmes may have conceded to a truth that would ultimately lead to her downfall.
Who Is Elizabeth Holmes?
MediaNews Group/Bay Area News via Getty Images
In 2003, at 19, then-Stanford University dropout Elizabeth Holmes founded the biomedical company Theranos—a combination of the word “therapy” and “diagnostics.” Her ambition was to revolutionize healthcare through an at-home device, which, using only a drop of blood pricked from a user’s finger, could run numerous laboratory tests.
Holmes recruited scientists and engineers to work on the project, and they spent the first three years attempting to build Holmes’ vision.
The original hope was to put the technology in a user’s home, allowing them to quickly and painlessly interact with a small device. Development on such a device, however, proved slow and challenging. Needing investment capital, Holmes demoed the device in Switzerland in 2006. The device, however, wasn’t working, so the team used a previous result during the demo, essentially faking a successful test.
In an interview with ABC News’s Nightline, Avie Tevanian, a lead software developer on Apple’s Mac OS X who later joined Theranos’ board of directors, said there were immediate red flags with Theranos’ technology.
“She’d prick her finger and then she would put blood on something and then she put it in the machine and then sometimes she would say… ‘this part doesn’t work anymore,’ which was a little bit odd. But some of that you expect to get from a startup that has a product that’s not done, right? But the problem was, it never got any better.”
Tevanian left (as did many others over the first several years), but Holmes kept onwards, bringing in more investment even though the team was still unable to develop a device which could consistently and accurately test a patient’s blood.
In 2010, Holmes and new investor/partner Sunny Balwani, reached out to Walgreens. Three years later, Walgreens opened a Theranos Wellness Center in Paolo Alto, California.
Despite outward acclaim for Holmes (her company was now valued at $10 billion), employees at Theranos were frustrated by the company’s claims about a technology they knew was still not working properly. Theranos was now actively processing patient samples, and those who worked on processing later said they were instructed not to speak up about the technology’s shortcomings.
The empire began to collapse in 2015, when The Wall Street Journal reporter John Carreyrou began reporting a series of articles questioning Theranos’ claims about its technology. (The articles would later be collected into the book Bad Blood, which the ABC News Podcast The Dropout and, therefore, the new scripted Hulu series of the same name, build upon.)
In November, Walgreens terminated its contract with Theranos and sued the company. (The companies later settled for an undisclosed amount.)
In January 2016, federal lab inspectors issued a warning concerning Theranos tests, saying the tests posed a health risk. In May, Balwani left Theranos, also splitting from Holmes.
In 2017, the SEC began a fraud investigation.
In 2018, after she paid an SEC fine, Holmes was indicted on fraud charges. Theranos announced Holmes would step down as chief executive. The company was then dissolved in September.
Holmes’ trial was scheduled to begin in August of 2020.
Where Is Elizabeth Holmes Now?
Justin Sullivan
After a year-long delay due to the Covid-19 pandemic, Holmes’ trial began in August 2021.
In January 2022, Holmes was found guilty of four charges of fraud (one wire fraud conspiracy count and three counts of substantive wire fraud).
According to the U.S. Attorney’s Office of the Northern District of California, Holmes now faces up to 20 years in prison as well as a $250,000 fine plus restitution.
Holmes is currently free on bond and awaiting her sentence hearing, which is scheduled for September 26, 2022. She is reportedly living at her $135 million estate in Silicon Valley.
This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. You may be able to find more information about this and similar content at piano.io
Comments are closed.