Erin Griffith

We discuss all of the individuals engaged on addressing the issues. Wade: “All these people were working hard and in good faith as they were undertaking these efforts, is that fair?” Das says sure (clearly).

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Erin Griffith

Wade is deflecting blame to Sunny Balwani, who was answerable for the lab. Before Dr. Das, lab administrators reported to Balwani. When Das joined, he reported on to Holmes, and Wade elicits testimony that this was a change designed to deal with the problems.

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Erin Griffith

Before Dr. Das joined Theranos, CMS inspected Theranos’s labs and issued a damning report about lab deficiencies, which we noticed yesterday.

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Erin Griffith

🩸 “Our Holmes Matter” continues in San Jose. 🩸Holmes lawyer Lance Wade is questioning Dr. Das, Theranos’s last lab director. Yesterday he testified that he determined to void as many as 60k Theranos exams.

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Erin Griffith

Dr. Das testifies that Theranos voided 50k-60k exams run on Edison machines — all take a look at run on the machines. Patients obtained “corrected” studies that simply stated VOID. Prosecution is completed with Dr. Das.

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Erin Griffith

Das testifies about one thing known as a “10x warning” on Feb. 25, 2015, when outcomes are available both above or under the right vary 10 occasions in a row. He says Theranos continued to report affected person outcomes after the 10x warning.

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Erin Griffith

Das disagreed — “the validation data had no bearing on the QA program” — and Theranos by no means resumed testing on these machines. He concludes: “I found these instruments to be unsuitable for clinical use.”

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Erin Griffith

Holmes recommended they provide CMS an alternate clarification that the issue was “not an instrument failure but a failure of the quality control / quality assurance program.”

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Erin Griffith

Das testifies that Theranos voided its exams from that 2014-2015 interval. He defined to Holmes that “these instruments were malperforming from the very beginning.”

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Erin Griffith

The report goes additional, noting “a possible patient impact for every test reported from the lab’s TPSU 3.5 instruments.” “The fraction of patient results truly impacted and the nature and magnitude of any effect are unknown.”

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Erin Griffith

The response contains such phrases as “High rates of 102s QC rule failures” and “DC CVs far exceeding limits for a stable testing process” which Das simplifies by saying: “It means there was a lot of imprecision noted.”

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Erin Griffith

Das testifies that he had to reply to CMS with a affected person influence evaluation out of a regulatory, skilled and moral obligation.

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Erin Griffith

Das testifies that he defined the problems to Holmes utilizing the instance of feminine sufferers returning irregular PSA ranges (a prostate take a look at) as a result of “females should generally not have PSA detectable.”

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Erin Griffith

The CMS report reveals that in quite a few months between 2014 and 2015, quite a lot of varieties of exams confirmed that 15 % of exams had been violating a standard high quality management rule.

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Erin Griffith

There’s a listing of “conditions” that weren’t met, together with “analytic systems,” that means the devices and strategies used. Das testifies that he mentioned the problems with Holmes and the Theranos crew.

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Erin Griffith

In Nov 2015, CMS did an onsite survey of Theranos’s CLIA lab. In January 2016, CMS despatched Theranos a discover with the heading: CONDITION LEVEL DEFICIENCIES – IMMEDIATE JEOPARDY

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Erin Griffith

Dr. Das was engaged on a CMS audit whereas at Theranos. We focus on a “statement of deficiencies” that was 121 pages lengthy.

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Erin Griffith

(He joined formally in March 2016, lengthy after Theranos had publicly launched.)

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Erin Griffith

Wow, Das testifies that when he began as lab director, he was not conscious that of Theranos performing any exams that it had developed in-house. No exams on Edison, Minilab or TSPU. No exams on finger stick samples.

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Erin Griffith

Defense is chiming in alongside the best way in opposition of this doc; the choose shoots it down as it’s already in proof.

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Erin Griffith

Kingshuk Das, a Theranos lab director, has taken the stand. Lowering the lights to point out displays on a projector within the courtroom feels a bit like a Junior High science class. We see CLIA Lab guidelines that reveals CMS (fed regulators) can revoke CLIA certificates for rule violations.

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Erin Griffith

Redirect and re-cross had been extraordinarily quick and Sawyer is excused. We’re breaking and one other former lab director — Kingshuk Das — is up after lunch. I will likely be getting a ticket to go to the courtroom so I can truly see the projected displays!

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Erin Griffith

That error was found when Theranos was getting ready for an audit of its Clia lab. Sawyer says she wasn’t certain if it was in prep for one or because of one. And with that Wade is completed.

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Erin Griffith

Again we focus on that Sawyer agreed to remain at Theranos six weeks after her preliminary contract. Apparently the paperwork had been processed incorrectly and he or she was nonetheless listed because the lab director for a bit and Daniel Young reached out to her about it.

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Erin Griffith

Wade asks about “an elaborate process where they warmed finger and noted places to draw from.” Sawyer: “That’s pretty standard for finger sticks.”

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Erin Griffith

Talkin’ ’bout QA QC LDTs (high quality assurance high quality management lab developed exams). Wade asks Sawyer if she signed off on an LDT for finger stick testing. “Had you ever seen such an elaborate and specific procedure?” Sawyer says no.

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Erin Griffith

Lance Wade, a lawyer for Holmes, pushed Sawyer to say she solely requested for the checklist as soon as. We additionally focus on an e-mail the place Sawyer agreed to increase her time at Theranos (meant to undercut her feedback that she give up over issues concerning the lab).

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Erin Griffith

The protection is continuous its cross-exam of Lynette Sawyer, who was a co-director of the Theranos lab for six months. Sawyer had testified that she was annoyed that Theranos didn’t give her a listing of the lab workers.

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Erin Griffith

They’re projecting the displays onto a wall, which isn’t actually coming by way of within the overflow room. A juror needed to run and get glasses. The choose says he’s “very embarrassed” that the courtroom is having these issues and apologizes.

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Erin Griffith

Fun occasions, we nonetheless haven’t began due to some sort of technical drawback.

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Erin Griffith

Back in San Jose for one more day of testimony in U.S. v. Holmes. The attorneys are as soon as once more preventing about upcoming testimony.

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Erin Griffith

She resigned in 2015 as a result of she was “very uncomfortable about the lack of clarity about the lab” and who was in it. There was not even an individual she may attain out to to speak about points she had with the paperwork she was meant to log out on.

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Erin Griffith

She by no means obtained studies about lab actions. She solely noticed paperwork about F.D.A.-approved exams on common blood analyzers. She had no understanding that Theranos was utilizing its personal units on assays. Whew.

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Erin Griffith

She by no means met Elizabeth Holmes. She by no means met her lab co-director (the longtime dermatologist of Sunny Balwani). Her job was to signal Docusign paperwork that she had no skill to edit.

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Erin Griffith

So, Dr. Sawyer grew to become co-director of the lab after Rosendorff left. She was informed nothing about his departure. She by no means went to Theranos’s lab. Never knew something about it growing its personal exams. Never heard of Edison, Minilab, or any of Theranos’s labs.

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Erin Griffith

New witness for the final half-hour of the day. The U.S. has known as Lynette Sawyer. She was a co-director of Theranos’s California medical lab between 2014 and 2015. She was initially meant to be a fill-in for 2-3 months.

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Erin Griffith

During that point, was Ms. Holmes nonetheless your major supply of details about Theranos? Lucas says sure. Lucas additionally testifies he didn’t have any details about Theranos’s monetary scenario earlier than investing in 2013.

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Erin Griffith

Defense made some factors earlier about Holmes’s age. Lucas incorrectly estimated her age as 19 when he first invested (she was 21). In re-cross, Bostic factors out that she was 29 with a decade on the helm of Theranos by the point Lucas’s second funding was made.

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Erin Griffith

Defense factors out that Lucas obtained a 2.5 % payment and 16 % of the upside for investments he made on behalf of Hall Group into Theranos. Black Diamond Ventures obtained comparable phrases on the investments made into Theranos on behalf of 30 people.

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Erin Griffith

Downey tried to make the purpose that Lucas’s rush to get into the late 2013 deal could have been to get in at a cheaper price since Theranos was additionally planning one other spherical of funding at the next worth the following yr.

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Erin Griffith

For the final half-hour or so we now have performed a deep dive into the minutia of Black Diamond’s 2006 funding. Which funds, the closes, the co-investors, the worth, the greenback quantities.

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Erin Griffith

Once once more we’re proven a million-dollar funding quantity with a 25 cents on the tip. Downey asks Lucas to elucidate that and he gives up a, “Really? You want me to answer that?” (The cause is to make it a good variety of shares.)

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Erin Griffith

We’re occurring a break and counsel plans to speak about “that morning matter” which was a cryptic factor about “transactions” earlier than we return. No concept what it might be.

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Erin Griffith

Downey spends plenty of time on Theranos’s patents and I’m unsure what the upshot is apart from displaying that having a patent is a optimistic for buyers. Lucas says growing the know-how is extra essential.

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Erin Griffith

Downey reveals Lucas a listing of normal due diligence paperwork — company information, and IP lists, and materials agreements, and so on. Did Lucas take a look at these for Theranos? “No we did not conduct all of this.”

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Erin Griffith

Downey asks if its customary for VC corporations to retain a legislation agency for diligence in offers and whether or not Don Lucas or Pete Thomas of ATA Ventures, one other Theranos V.C. investor, did so. Chris Lucas says he doesn’t know.

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Erin Griffith

Lucas is now being cross-examined by Kevin Downey. Did he interact within the regular strategy of assessing an organization? “I don’t remember how much diligence we did. This was a situation where Don had already been on the board. … Obviously we felt very comfortable.”

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Erin Griffith

Once once more, we see the Parloff Fortune article. At concern just isn’t the truth that the article had inaccurate data (which Fortune later corrected), it’s that Holmes despatched it to so many buyers. “Great article!” Lucas says. “Very proud of the situation, proud we were involved, very proud of Elizabeth, the whole thing.”

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Erin Griffith

Why didn’t Holmes wish to give full financials to buyers? Trade secrets and techniques. “She was very concerned, and potentially rightly so, that what she was working on was very transformative and they did not want to have any information get out into the public domain so as to give one of her competitors a chance to crush the company before the company got to fruition.”

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Erin Griffith

Lucas testifies that the danger profile of his two investments in Theranos had been very completely different: In 2006, it was early stage and excessive danger. By the newest stage 2013 deal, “the risk goes down and you would hope to have a higher certainty of return.”

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Erin Griffith

Lucas testifies that it was very uncommon to speculate with out getting full financials from a portfolio firm however he felt snug doing it with Theranos due to his relationship with Holmes.

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Erin Griffith

U.S. Attorney John Bostic goes by way of all of the legalese within the funding docs, since we all know that the protection will attempt to use these disclaimers that say buyers acknowledge danger and are refined and so on. in its cross-exam.

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Erin Griffith

This is a wire fraud case so we gotta discuss concerning the precise, you realize, cash wires. Lucas discusses the logistics of the wire switch from Lucas’s fund to Theranos, which, enjoyable reality, is definitely formally named Real-Time Cures.

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Erin Griffith

Why the urgency? Because Walgreens needed to convert its $40 million notice to fairness by the tip of the yr. Lucas says he supported that as a result of “You want more people in the wagon helping fund the company.”

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Erin Griffith

Lucas was additionally cautious of how shortly Theranos was making an attempt to shut the spherical. Two weeks between opening the spherical and shutting was “quite compressed.”

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Erin Griffith

We see a listing of questions that Lucas emailed to Holmes prematurely of the 2013 funding. He was pushing her on when buyers may get a liquidity occasion.

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Erin Griffith

~ Checking the containers ~ Prosecutor John Bostic asks about all the varied (inaccurate) claims Theranos made about its know-how, partnerships, enlargement plans, accuracy, and so on. Was that an essential think about investing and why? Every investor has gotten this checklist of questions.

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Erin Griffith

In 2013, the agency invested $5.4 million. Holmes was his essential supply of information for Theranos. His uncle secondary. They often had meals collectively and knew one another socially. But “there was not a lot of transparency” about what was occurring within the firm, he stated.

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Erin Griffith

In 2006, Black Diamond Ventures invested $1.5 million into Theranos. “It was certainly beyond a drawing on a napkin but we didn’t believe at that time that is was functional and fully developed.”

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Erin Griffith

Chris Lucas based the agency in 1998. Don Lucas launched him to Holmes, who he stated this about: “She’s very passionate about the project. Very sincere in what she was trying to do. Worked all the time. It was all Theranos all the time for Elizabeth.”

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Erin Griffith

🩸🩸Back in courtroom at the moment for U.S. v. Holmes.🩸🩸 The United States has known as Christopher Lucas, whose agency Black Diamond Ventures was an early investor Theranos. He is the nephew of the famed investor Donald Lucas.

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Erin Woo

After a really environment friendly redirect, Mosley is completed, and courtroom is ending for the day. Trial will resume at 9:30 a.m. Pacific time tomorrow.

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Erin Woo

Did Theranos at present have income? Yes. Use its personal units? Yes. Schenk: “Did you think Ms. Holmes had a vision that one day Pfizer would write something good about Theranos?” No, he learn it as a examine that had already occurred.

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Erin Woo

All of Schenk’s questions are about whether or not Mosley thought Theranos’s claims had been present, or Ms. Holmes’s imaginative and prescient. Over and over, Mosley’s saying that he thought Theranos was at present doing this stuff.

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Erin Woo

Mosley stated he had an understanding that Theranos may carry out correct exams. Again, that got here from the supplies. He additionally thought that they had a wholesome relationship with Walgreens on the time, from the supplies and the Fortune article.

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Erin Woo

Schenk: Did you perceive that Theranos may at present carry out an enormous array of exams? Mosley: I did. Mosley testifies that understanding got here from the written supplies.

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Erin Woo

Cross is completed, and we’re onto redirect. Schenk says he has simply “a couple of questions.”

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Erin Woo

Back to a number of the web site language that got here up in Edlin’s testimony. “Occasionally, a venipuncture may be required based on the lab order, but this is uncommon, and our aim is to eliminate this entirely.” Mosley: “I don’t believe I knew this at the time.

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Erin Woo

We’re looking at an archived copy of the Walgreens website. A prominent heading: “Goodbye big, bad needle.” A footnote all the best way down the web page notes that testing may occur with a finger stick or venous draw. Mosley says he doesn’t bear in mind seeing this language.

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Erin Woo

We’re returning to due diligence. Wade asks if Mosley appeared on the Theranos web site, and Mosley responds, “I can’t imagine that I didn’t look at the website.”

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Erin Woo

Kissinger is quoted on this Parloff article saying that “there is no performance associated with” Elizabeth, which is ironic, provided that her public persona — the voice, the turtlenecks, the purple lipstick, and so on. — was such an enormous a part of the Theranos delusion!

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Erin Woo

Mosley testifies that the article was “a very compelling story” that was “absolutely” impactful when he learn it. Wade’s going by way of the article web page by web page.

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Erin Woo

We’re again to the Parloff article! Mosley despatched it to the C.E.O. of the DeVos household workplace.

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Erin Woo

Holmes spoke on an hour-long panel known as “Game Changers.” (Wade wished to publish extra of this doc, which listed the entire completely different audio system on the 2014 BDT convention, however Judge Davila stated it wasn’t related.)

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Erin Woo

We’re discussing an investor convention the place Mosley met Holmes for the primary time. Wade asks if Mosley would characterize it as a “Woodstock for private family offices,” the most effective line of the day to this point; Mosley declines however agrees that it was for “high net worth individuals.”

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Erin Woo

Wade is now speaking concerning the Pfizer report. He has Mosley verify that he thought Pfizer had written the report, however by no means truly immediately requested whether or not Pfizer had.

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Erin Woo

Wade is asking about Mosley’s characterization of Theranos’s “national retail footprint,” noting that the Walgreens partnership was solely in CA and AZ — seemingly making an attempt to point out that Mosley could have additionally overstated Theranos’s attain.

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Erin Woo

Mosley additionally wrote: “The most extensive evidence supplied regarding the reliability of the Theranos technology and its application is a Study Report prepared by Pfizer based on a clinical cancer treatment trial.” As we all know, Pfizer didn’t put together it.

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Erin Woo

We’re again to the memo Mosley wrote. He referred to a Johns Hopkins overview that concluded that the know-how “is novel and sound.” Mosley additionally famous the Walgreens partnership. Wade asks: Would you count on Walgreens to do due diligence? Mosley responds: Yes.

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Erin Woo

Wade is strolling us by way of the binder Theranos gave Mosley to overview. Included within the binder: a line claiming that “Theranos technology is able to perform the full menu of laboratory tests,” together with round 200 pages of supporting materials.

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Erin Woo

Still, in a 9/2/14 memo Mosley wrote to Kissinger, he wrote: “There is substantial data and other information attesting to the quality, performance and reliability of the Theranos technology and equipment.” Wade highlights this line.

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Erin Woo

Wade asks Mosley to verify that he hadn’t performed substantial analysis into the corporate at this level, and Mosley counters that he doesn’t assume he would have had a technique to.

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Erin Woo

Mosley testifies that his 2014 evaluation of Theranos got here from printed supplies offered by the corporate and his conversations with Holmes. Wade notes that Mosley didn’t point out media in his define, however Mosley stated he had “certainly” learn media articles concerning the firm.

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Erin Woo

He was additionally linked with the Oppenheimer household ($20 million) and John Elkann ($5 million), who had been associates of Kissinger’s however not Mosley’s shoppers.

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Erin Woo

Mosley was VERY well-connected with Theranos’s buyers. Per a slide entered into proof, he was the legal professional for the Walton household ($150 million invested), DeVos household ($100 million), Cox household, ($100 million), Andreas Dracopoulos ($25 million), Henry Kissinger ($3 million).

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Erin Woo

Good morning! I’m again within the courtroom for the Elizabeth Holmes trial. After some pretrial arguments about whether or not testimony from a affected person known as BB needs to be excluded (no determination but disclosed), the lawyer Daniel Mosley is on the stand to proceed his cross.

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Erin Griffith

The jury is dismissed for the day. Chaotic vibes at the moment, between the man who snapped a photograph within the courtroom, a stifling 76 diploma room and a labored up particular person within the corridor bugging journalists about their parking dispute.

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Erin Griffith

Mosley’s description of what he does at BDT is comically imprecise. “I’m involved in the management of the firm, I run the New York office. We advise and work with high net worth families and I do that type of work.”

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Erin Griffith

I think about this will likely be a contentious cross-examination. We’re already speaking third-generation billionaires and ranges of white shoe legislation agency status.

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Erin Griffith

Theranos’s funding docs had a provision for necessary redemption, i.e., the corporate may purchase again shares at any worth at any time. 🤔 Holmes reassured Mosley that wouldn’t occur.

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Erin Griffith

We see a listing of Theranos’s dangers in Mosley’s memo to Kissinger. Prosecution asks why it doesn’t checklist the danger that Holmes may give inaccurate descriptions of her firm’s know-how. “I did not believe it was a risk,” he says.

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Erin Griffith

Mosley testifies that he favored that Elizabeth Holmes’ shares in Theranos had 100x voting energy of the opposite buyers. “She was obviously a visionary that had created this company and developed the technology and having her in control of the company was a good thing.”

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Erin Griffith

Mosley wrote a memo to Henry Kissinger about Theranos’s know-how with a robust, sturdy endorsement. He believed absolutely within the conclusions from the pharma validation studies.

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Erin Griffith

Byron Trott’s agency, BDT, threw a convention in Chicago in 2014, the place Mosley launched Holmes to the DeVos household, the Walton household and the Cox household — all shoppers of his.

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Erin Griffith

We discuss concerning the income projections and Schenk pre-empts the protection’s argument that projections are concerning the future and never imagined to be correct by asking Mosley about that. Since it was October, Mosley anticipated the $140 million income projection for the yr to be fairly shut.

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Erin Griffith

It is unimaginable how a lot mileage Holmes obtained out of 1 Fortune article. I feel each investor who has testified stated they learn it. I suppose prosecution retains bringing it up as a result of we all know the writer Roger Parloff will quickly testify.

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Erin Griffith

We run by way of your complete rigmarole we now have now seen many occasions: itemizing out the particular and clear guarantees Theranos made to buyers about its know-how and the investor testifying they invested on that data.

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Erin Griffith

We’re taking a look at illegible handwritten notes Mosley took and it looks like deciphering historic scrolls

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Erin Griffith

Holmes snail mailed Mosley a thick stack of displays in 2014. We focus on strains like: “The company plans to be private for the long term.” “Theranos has grown from cash from its contracts for some time.”

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Erin Griffith

The Web of Powerful Men goes on: We see an e-mail the place Mosley gives to attach Holmes to the Walton household. Mosley says Holmes wished buyers who had been “high quality families.”

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Erin Griffith

Next witness is Dan Mosley, a lawyer and man about enterprise. He invested $6 million in Theranos after Henry Kissinger, his shopper, launched him in 2014. He now works for Byron Trott, Warren Buffett’s banker who was mentioned in the course of the DeVos testimony.

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Erin Griffith

Theranos’s work with S-P fell off when the corporate merged with Merck. We see emails from Holmes to Cullen making an attempt to maneuver the validation ahead with no response from Cullen. Kline make the ultimate level that S-P by no means informed Holmes about her issues.

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Erin Griffith

Kline, who’s so much folksier than Wade, asks Cullen to repeat that she by no means voiced her issues with Theranos to the corporate as a result of it was awkward. Apart from one e-mail, is Cullen conscious of any emails from S-P or Theranos asking for extra data? “No.”

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Erin Griffith

(Note: This was 2009.) “There was insufficient technical detail for us to be able to evaluate the technology.” She says Holmes answered nearly solely, even questions directed to others.

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Erin Griffith

Cullen testifies she by no means objected to the validation protocol. We see the bill for Theranos’s work with S-P with the target of “comprehensive validation of the Theranos cytokine panel under F.D.A./I.C.H. guidelines.”

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Erin Griffith

Kline asks concerning the validation work that S-P did with Theranos was adequate. “It hit the requirements, but at the end of the day, the execution would not have been in alignment with F.D.A. requirements for validation.”

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Erin Griffith

John Kline is main a cross-examination. Cullen testifies that S-P was impressed with the demo they did of 1 blood take a look at on a Theranos machine they got.

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Erin Griffith

In the second model of this doc, the conclusion provides the phrase “more” to the road concerning the outcomes’ accuracy. Cullen says once more she doesn’t agree with that conclusion. End of direct examination of Cullen.

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Erin Griffith

We see the notorious validation report that featured Schering-Plough brand. Cullen says she didn’t agree with the report’s conclusions and nobody at S-P stated the docs had been correct.

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Erin Griffith

Cullen says she didn’t say something about it on the assembly as a result of “um, it’s awkward.” Unfortunately I can’t see Holmes’s expression however I’ve a sense in the event that they run into one another within the lavatory later it’ll be much more awkward! 😬

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Erin Griffith

Cullen provides that there have been no direct solutions to questions and the questions had been pretty technical, so the reply needs to be pretty technical and direct. “There were what I’d describe as cagey responses or attempts to redirect to other topics of discussion.”

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Erin Griffith

We see a calendar invite and agenda from a May 5 assembly. This was the primary time Cullen met Holmes in particular person. Cullen stated she requested many questions and “was dissatisfied, quite honestly, with the response to the questions.”

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Erin Griffith

Peterson is excused. Next witness is Constance Cullen. Cullen labored at Schering-Plough. They requested her to take part in evaluating Theranos’s know-how. They beta examined a number of machines and he or she visited Theranos’s workplaces.

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Erin Griffith

It’s often fairly clear within the gallery who’s a reporter and who’s a member of the general public. There are all the time a number of individuals in fits who I can’t fairly place. The man who took a photograph had a swimsuit on. He is, unsurprisingly, not right here now.

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Erin Griffith

Uh… we went on a break as a result of somebody walked into the again of the courtroom and took a photograph. That particular person is now being chastised by the choose.

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Erin Griffith

Theranos informed RDV in October of 2014 that it could do $140 million in income that yr. It had zero. Prosecutor Robert Leach: “Did you in anyway dream that revenue for that year would be zero?” She says no, “projections should be somewhat close.”

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Erin Griffith

Peterson pushes again: “You’re trying to measure our sophistication as an investor when we weren’t given complete information.” Wade strikes to strike and Judge Davila tells Peterson to attend for Mr. Wade’s questions.

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Erin Griffith

Wade reveals Peterson the authorized settlement for the funding and goes by way of all the traditional disclaimers — projections can change, the funding was speculative, RDV (the DeVos agency) was accredited and complicated, and so on. The “you should have known better” argument.

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Erin Griffith

Some factors of competition: When the funding determination was made. Whether Peterson had gone to Theranos’s web site to see it marketed CLIA lab exams. What Theranos stated about its army work. Comments Peterson made in prior depositions that contradict her testimony at the moment.

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Erin Griffith

Wade retains asking questions meant to entice Peterson over prior feedback, she retains providing extra detailed solutions, Wade retains putting her solutions from file. After putting at the least 5, the choose scolds Wade: “Some of your questions are lend themselves to an explanation.”

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Erin Griffith

Right out the gate prosecution objects to an e-mail protection is utilizing to refresh Peterson’s reminiscence that she wasn’t on. Judge Davila: Anything can be utilized to refresh a witness’s recollection — a shoe, a sock…. Defense legal professional Lance Wade: I’ll maintain my sneakers on, your honor.

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Erin Griffith

🩸 US v. Holmes continues at the moment with cross-examination of Lisa Peterson, who managed the DeVos household’s $100 million funding in Theranos.

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Erin Griffith

Court for US v. Holmes is cancelled for at the moment, damaged water essential. Back Tuesday! Weekly “wrap-up” of someday of testimony coming quickly.

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Erin Griffith

Now a courtroom marshall is actually hovering over my shoulder watching and listening to me sort. There is an overflow room however the sound is terrible and unreliable. So.. .I feel I’ll save my keystrokes for my very own notes and restrict my tweeting for the remainder of at the moment.

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Erin Griffith

It went on and on, with Wade even studying notes from a deposition by RDV attorneys from years prior that used the time period unicorn and Peterson insisting, “I would never use that word, unicorn.”

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Erin Griffith

Wade: Do you realize what a unicorn is?

Peterson: Can you clarify it?

Wade: You’re the funding skilled.

Peterson: It’s not one thing we usually spend money on.

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Erin Griffith

Fantastic unicorn content material with protection and witness quibbling over the definition of a unicorn.

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Erin Griffith

Lots of debate about Dan Mosley, who was a lawyer at Cravath. Some paperwork had been emailed by way of private Gmail accounts, Peterson stated, as a result of “We didn’t know what his role was in all of this. We didn’t want to get him in trouble.”

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Erin Griffith

Lance Wade (Holmes’s lawyer) just isn’t taking part in good with Peterson, grilling her on whether or not the DeVos household truly ever learn her memos and her previous feedback below oath in depositions about that reality.

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Erin Griffith

This is an fascinating computer virus to play the jury movies that clearly and succinctly summarize what we now have realized up to now about Theranos’s issues and likewise displaying Holmes saying the buck stops together with her – “I’m the founder and CEO of this company.”

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Erin Griffith

Judge Davila has overruled objections to taking part in clips of Holmes on Mad Money and we’re watching the half the place she says “This is what happens when you work to change things. First they think you’re crazy, then they fight you, then you change the world.”

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Erin Griffith

We are taking a look at Theranos’s income projections, together with that daring $990m for 2015 (with a $230m revenue). Peterson stated she didn’t know that Theranos had zero income in 2013 and 2012.

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Erin Griffith

Recall {that a} Pfizer exec testified it had nothing to do with that validation report. It by no means validated Theranos’s tech. But Theranos put its brand on the report and confirmed it to buyers.

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Erin Griffith

Prosecution reveals Peterson the falsified validation report we now have heard a lot about. “Did you believe this report as prepared by Pfizer?” “Yes.” Peterson says that endorsement was a giant think about investing.

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Erin Griffith

A well-known rundown of Theranos claims to buyers. Its know-how had been “comprehensively validated over the course of the last 7 years by 10 of the 15 largest pharmaceutical companies” and subjected to proficiency testing and audits from regulatory businesses.

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Erin Griffith

We see a memo that hits this level once more, stating that Theranos’s purpose was to search out buyers “with less emphasis on liquidity and more emphasis on long term capital appreciation.”

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Erin Griffith

“She was hand picking 5-6 private families to invest in her company. … She was inviting us to participate in this opportunity.” Peterson says Holmes didn’t need giant PE corporations/institutional buyers b/c they wished Theranos to go public and he or she wished to remain personal.

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Erin Griffith

Interesting level about energy dynamics of investing in excessive danger startup unicorns: “Did you feel like Theranos was selecting you as an investor?” Peterson: “Very much so.”

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Erin Griffith

When Peterson’s crew requested Holmes concerning the dangers of investing in Theranos, she stated the danger was within the “execution” of the Walgreens rollout. Was there a dialogue of know-how danger? Peterson says no.

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Erin Griffith

We see an e-mail from Jerry Tubergen, C.E.O. of RDV, to colleagues. He connected the notorious Fortune cowl story, writing “This morning I had one of the most interesting meetings I can recall with the women profiled in the attached Fortune magazine article.”

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Erin Griffith

Lisa Peterson has taken the stand and defined her function at RDV Corporation, the household workplace of the DeVos’s. She manages their PE fund investments and co-investments.

She requested to work on the Theranos deal bc she’d had some healthcare investing expertise.

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Erin Griffith

Needless to say that is extraordinarily tense for the media right here. Members of the press now policing bystanders to comply with the foundations (silence telephones and so on) in order to not piss off the choose.

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Erin Griffith

(First of all of the juror who finds the typing distracting ought to actually put on the listening to aids offered by the courtroom. Second, it is a pandemic drawback. Jurors are spaced out and a few are sitting within the first rows of the viewers.)

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Erin Griffith

Ugh as soon as once more the jurors are annoyed with loud typing from the press gallery. The choose says if he will get one other grievance he’ll banish all laptops to the overflow room. A courtroom marshal goes to implement the “silent keyboard” rule (WHICH IS NOT A THING!).

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Erin Griffith

After her we are going to hear from Alan Eisenman, one other investor.

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Erin Griffith

Today’s first witness will likely be Lisa Peterson, who manages cash for the DeVos household.

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Erin Griffith

If there may be one factor Judge Davila hates its getting right into a “mini-trial” about facet points with no bearing on the problems being tried.

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Erin Griffith

🩸 Elizabeth Holmes trial, Week 8 🩸

The attorneys are as soon as once more beginning the day by preventing over proof: Prosecution needs to point out video clips of Elizabeth Holmes defending Theranos on Mad Money and elsewhere after the WSJ expose.

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Erin Griffith

Cross-examination wrapped up. P.S. Sounds like we’re going to start out doing bonus trial days on Mondays. All blood on a regular basis!! 🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉🩸💉

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Erin Griffith

Defense asks whether or not the repute of Don Lucas, the partnership with Walgreens, its patent portfolio and its large identify board members had been elements in his determination to speculate. Tolbert says sure.

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Erin Griffith

The name in query was truly with Chris Lucas’s funding fund and Holmes was solely on a part of it. Defense performs part of the tape the place Lucas explains a inventory break up that offers Holmes full management: “She has a firm grasp on the company — let there be no mistake.”

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Erin Griffith

In some ways this trial boils down one central stress which is taking part in out on this cross-examination: Were these buyers fools who didn’t do correct diligence? Or was their diligence tainted as a result of Holmes fed them unhealthy data?

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Erin Griffith

I’m unsure how properly this clip truly makes the protection’s case, since she instantly says the funding cash will permit them to select up work on these tasks “in parallel.” Defense hits Tolbert for not asking following up questions after the decision.

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Erin Griffith

On cross-examination, protection replays some parts of the investor name. In this one, Holmes discusses how Theranos was pausing its work on army and pharmaceutical tasks with the intention to focus completely on the retail rollout.

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Erin Griffith

We’re now going by way of the technical strategy of describing how Hall Group wired its funding cash to Theranos. This is, in spite of everything, a wire fraud case.

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Erin Griffith

One factor talked about on the investor name which has not been addressed — Holmes famous that there have been some early buyers who had been on the lookout for liquidity. Wonder if we are going to study particulars about whether or not anybody cashed out alongside the best way and who they had been.

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Erin Griffith

Tolbert says Theranos’s purported army work was a giant a part of why he invested as a result of it spoke to a higher mission. “Theranos wasn’t just about an opportunity to make money … but to do so in a way that was beneficial for lots and lots and lots of people.”

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Erin Griffith

I.P.O.? Theranos has a really long-term mind-set. “We plan on doing this for the next 20-30-40-50 years.” Military? Confidentially, it’s “a big deal for us.” Competition? That’s why we’re so secretive. How are costs so low? We are remodeling the care course of, ergo financial savings.

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Erin Griffith

We take heed to a protracted recording of Holmes answering questions from buyers about when the corporate will go public, whether or not it really works with the army and its competitors. Her solutions, because the Pfizer man eloquently put it, are “non-informative, tangential, deflective and evasive.”

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Erin Griffith

In the recording, Holmes says Theranos was rising on “cash from operations,” a.okay.a. profitably, since 2006. Tolbert testifies he believed the proceeds of the 2013 fund-raise could be used for retail enlargement — not R&D or tech improvement.

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Erin Griffith

I forgot to tweet that one other juror obtained dismissed at the moment for trigger. Kinda nervous I’m unhealthy luck, each time I come again from lacking a number of days of the trial, one other one bites the mud.

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Erin Griffith

In a 3rd recording, Holmes describes fund-raising — in 2013 Theranos issued shares at $75 a share, up from 82 cents a share when Hall Group and Chris Lucas’s agency first invested in 2006.

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Erin Griffith

In a second recording, we hear Holmes describing the best way Theranos disrupts conventional phlebotomy with its finger prick exams. Tolbert testifies that that’s the reason he invested.

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Erin Griffith

We’re going till 4 p.m. at the moment however I doubt we get to a few not to mention 4 witnesses. Tolbert testifies concerning the clip we simply heard and his impression of what he thought Theranos was truly doing. (Blood testing machines — not a central lab.)

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Erin Griffith

Holmes glanced verrrrrry briefly over to the jury after the recording. Otherwise sitting up stick straight and never shifting, as traditional.

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Erin Griffith

Unfortunately I’m not capable of see the jurors’ faces upon listening to Holmes’s voice for the primary time. In the recording, she is giving the same old pitch about Theranos’s large imaginative and prescient of making “the largest lab in the country” and to “change the reality of lab testing today.”

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Erin Griffith

We are going to take heed to some recordings of a name Holmes had with buyers. Before introducing them, Schenk, the prosecutor, requested Tolbert if he had had the prospect to “observe” Holmes’s voice in conferences and on the decision. 👀

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Erin Griffith

In 2013, Hall Group invested $5 million into the corporate. The firm had round 10 days to determine on the funding and the share worth had jumped to $75 a share. Tolbert recorded a pitch name with Holmes. He stated he’d been annoyed about not having plenty of details about Theranos.

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Erin Griffith

We see an e-mail from Chris Lucas to Hall Group in 2013 about Theranos including board members. It says “Hopefully, this also means we will start receiving more communication from the company.” Tolbert stated he’d been wanting extra visibility into the corporate.

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Erin Griffith

Theranos additionally had promised buyers it could go public in 2008. 🙃

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Erin Griffith

After that, in 2006, Tolbert determined to speculate $2 million by way of the funding fund of Don Lucas’s son Chris.

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Erin Griffith

Tolbert had dinner with Holmes and Lucas the place they talked about Holmes’s imaginative and prescient and likewise “heard some fun stories from Don Lucas about his investment career.” He additionally visited Theranos’s workplace and somebody gave him a cartridge.

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Erin Griffith

We see an in depth monetary projection from Theranos that reveals the corporate turning into worthwhile in 2007. (Narrator: It didn’t…)

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Erin Griffith

Point for crew “Theranos is not a Silicon Valley company because it didn’t raise from traditional venture capitalists”: Hall Group was primarily an actual property funding agency. Counterpoint: Hall Group was launched to Theranos by Don Lucas.

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Erin Griffith

Next witness: Bryan Tolbert of Hall Group. The agency invested $5 million in Theranos in late 2013.

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Erin Griffith

On cross-examination of Shane Weber, Holmes lawyer John Cline hammers the purpose that Weber didn’t ship his report about Theranos to Holmes. The level (I assume) being that, with out seeing the report, Theranos had each cause to maintain pondering Pfizer favored its know-how.

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Erin Griffith

That’s it for direct.

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Erin Griffith

Did Pfizer and Theranos have any significant enterprise dealings after 2010? No. Do you agree with assertion that Pfizer validated Theranos’s know-how? No I don’t. You got here to the other conclusion? I did.

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Erin Griffith

A humorous factor about TV trials is that they clarify the objections in regular language however in actual life they are saying issues like “objection, this is 702 territory” or “same 406 from last time your honor.”

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Erin Griffith

We get a facet by facet of the report, one with Theranos brand on it and one with the Theranos and Pfizer logos on it. Would or not it’s honest to say in 2010 or after that Pfizer endorsed Theranos’s know-how or comprehensively validated Theranos’s know-how? Weber: “No”

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Erin Griffith

Now we see an e-mail from Walgreens to Pfizer, which incorporates the validation report I discussed above the place Theranos put Pfizer’s brand and implied its approval. Weber stated he hadn’t seen this earlier than the feds confirmed it to him.

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Erin Griffith

Weber known as Elizabeth Holmes to inform her Pfizer wasn’t going to work with Theranos. In an e-mail to a colleague, he stated “I was polite clear crisp and patiently firm as she pushed back.” Writes that Holmes requested for different names at Pfizer to speak to and he “politely deflected.”

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Erin Griffith

The doc additional lists six technical due diligence questions that Weber requested Theranos execs on a telephone name, and concludes their solutions had been “oblique, deflective or evasive non-informative answers.”

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Erin Griffith

Most of Weber’s solutions have been very technical and filled with jargon certain to confuse jurors however that checklist of adjectives hits fairly laborious. (Defense tried to object.)

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Erin Griffith

Further in his abstract, Weber says Theranos’s conclusions are “not believable” and calls the corporate’s solutions to due diligence questions “non-informative, tangential, deflective or evasive”

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Erin Griffith

(Recall that final week we noticed a doc with Pfizer’s brand on it that implied that the corporate validated Theranos’s know-how, which Holmes used to solicit funding from Walgreens and others)

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Erin Griffith

After speaking with Elizabeth Holmes and reviewing a bunch of paperwork (together with a patent), Weber created a abstract report on using Theranos know-how. Believe that is the report the protection didn’t need proven to jurors, and the choose allowed Page 1. Weber’s suggestion: “Theranos does not at this time have any diagnostic or clinical interest to Pfizer.”

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Erin Griffith

We start with a collection of emails establishing why Weber was concerned with Theranos at Pfizer — his function was to make a suggestion to the corporate about its know-how. “We were looking for diagnostic capabilities that would open the door for more effective intake of patients.”

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Erin Griffith

The U.S. has known as Shane Weber, who was a scientist at Pfizer. He is talking loudly and clearly into the mic and for that I thank him. 🙏

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Erin Griffith

Sounds like we’ll be listening to from our first investor (other than Walgreens): Brian Tolbert of the funding agency Hall Group is more likely to testify at the moment.

Erin Griffith headshot

 

Erin Griffith

🩸 Back in courtroom for the fraud trial of Elizabeth Holmes. It is wet, the prosecution plans to name 4 witnesses at the moment, and the press corp is typing each so fastidiously after being scolded for distracting a juror with our keyboards.

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Erin Griffith

As traditional, we’re beginning late as a result of the attorneys are preventing over admitting a doc and there is a matter with a juror.

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Erin Woo

Edlin is excused, and we’re breaking for the day. Erin Griffith will likely be within the courtroom on Friday when trial resumes.

Erin Woo headshot

 

Erin Woo

Edlin on his selection to go away: “In the year after the initial WSJ articles came out, the company claimed that it would be able to prove that the technology worked and prove that those claims were not true. The company was unable to convince anyone that those claims were untrue and that its technology and science worked. That gave me serious doubts as to whether the company was capable of proving its technology worked.” He got here to the conclusion they’d by no means be capable of show it, he stated.

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Erin Woo

Bostic: At Theranos, whose determination was it to reveal what data to the press? Edlin: In my expertise, Elizabeth was the one one who communicated immediately with the press. Bostic: Did anybody make selections about what she was allowed to say? Edlin: I don’t know if she consulted with anybody.

Erin Woo headshot

 

Erin Woo

Bostic: Who did the ultimate overview of investor displays? Edlin: Elizabeth.

Erin Woo headshot

 

Erin Woo

Now, taking a look at when Holmes weighed in on web site language, asking to say a 4-hour window moderately than 2 hours. Rather than addressing this, Bostic appears to be mentioning that in different circumstances (together with web site/investor displays), language round “superior accuracy” made it in.

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Erin Woo

OK, and we’re now again to an e-mail Downey introduced up, the place Holmes needs to place the language across the venous attract the primary physique of textual content. The language she wished known as venipunctures “uncommon.” Bostic factors out that venous attracts had been utilized in 40 % of the time at Walgreens.

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Erin Woo

Bostic: Who had last say over what outcomes had been reported within the demo? Edlin: Daniel did and Elizabeth did.

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Erin Woo

Bostic: Was a part of {that a} need to point out that the know-how carried out properly? Edlin: Yes. Bostic: How is that this goal served by hiding errors? Edlin: I don’t know. Bostic: What about withholding outcomes? Edlin: I don’t know.

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Erin Woo

Rapid-fire questioning from Bostic simply now. Edlin: The goal of the tech demonstrations was to “showcase or demonstrate the Theranos technology. In some cases, tests were run. In others, tests weren’t run. In general, to show the functionality of the Theranos technology.”

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Erin Woo

Back from break, and Bostic says he has round half-hour left of cross-examination. Downey says that we’ll end with Edlin at the moment. We’re now taking a look at a doc relating to the Limited Objective Experiment with the U.S. Central Command, which Edlin testified once more didn’t happen. Completion of this examine was a prerequisite to medical use of Theranos units by the army, Edlin confirms.

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Erin Woo

Downey wraps cross, and Bostic is again for redirect. We’re beginning with the connection with the army. Bostic notes that solely 28 individuals participated within the burn examine. Edlin additionally doubles down on his earlier testimony that the army by no means used Theranos units on troopers.

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Erin Woo

Looking at one other e-mail concerning the brochure for Walgreens, the place Christian Holmes is relaying suggestions from Elizabeth. Throughout cross, Downey has introduced up emails/situations the place Elizabeth has advocated for transparency and disclosure to counteract what we noticed in direct.

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Erin Woo

Back from break and taking a look at a presentation Edlin helped put together for an investor. In an e-mail questioning the accuracy of a declare in a single graph, Holmes wrote: “If they currently do refrigerate then we should reflect that so we are making an accurate claim.”

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Erin Woo

Downey is making an attempt to ascertain that using the demo app, introduced up by the federal government, isn’t misleading/malicious, mentioning that somebody could present up and never get their blood drawn and that there have been completely different protocols for various eventualities.

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Erin Woo

Downey is discussing the demo app, which as proven earlier than shields failures from the affected person. “You were not trying to deceive anyone in this demo process, correct? And you did not understand that anyone else at Theranos was trying to deceive anyone in this process?” Edlin agrees.

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Erin Woo

Shifting matters to demos, after round an hour of questioning about Theranos’s army relationship. Around 10-15 individuals labored on the crew to do demos, with Daniel Young reviewing and approving all demos, Edlin testifies.

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Erin Woo

Givens wrote that the machine “seemed to function well in the environment,” and her solely grievance was the touch-screen. She wrote that she hoped to get funding for a full proposal.

Erin Woo headshot

 

Erin Woo

Downey is mentioning emails from Melissa Givens of U.S. Africa Command and former Theranos V.P. Daniel Young indicating that the gadget carried out properly in excessive temperatures in Africa. Yesterday, the federal government confirmed proof saying that the units couldn’t function over 82 levels.

Erin Woo headshot

 

Erin Woo

Good morning from San Jose! Daniel Edlin is again on the stand. We’re nonetheless anticipating former Pfizer diagnostics director Shane Weber subsequent.

Erin Woo headshot

 

Erin Woo

We’re breaking for the day. I’ll be again tomorrow at 9 a.m. for extra of Edlin’s cross-examination.

Erin Woo headshot

 

Erin Woo

Downey asks Edlin a collection of questions round whether or not he ever took steps to place ahead any declare he knew to be false. Edlin says repeatedly that he didn’t. “That information was reliant on information you had gotten from scientists in the company, correct?” “Yes.”

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Erin Woo

Downey began by having Edlin verify that he was not a tech skilled — Edlin majored in public coverage at Duke.

Erin Woo headshot

 

Erin Woo

And — protection adjustments the topic utterly. We’re again to speaking about Theranos’s know-how as we start cross-examination.

Erin Woo headshot

 

Erin Woo

With that, we’re by way of with direct and onto cross. Testimony is scheduled to finish at 3 at the moment, so Edlin will probably proceed tomorrow.

Erin Woo headshot

 

Erin Woo

Edlin stated he was in conferences the place Balwani stated he would defer to Holmes. “Generally, she was the C.E.O., so she had the final decision-making authority.” Edlin stated he noticed them disagree about “certain topics.” When they disagreed, Edlin says there wasn’t all the time a call that was made. He noticed occasions when Balwani would defer to Holmes however can’t recall the reverse.

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Erin Woo

Back from break. Bostic is pivoting to what Edlin noticed of Holmes and Balwani working collectively. Holmes and Balwani had workplaces subsequent to one another with glass partitions. They typically ate lunch collectively and had been in dialogue collectively, he stated, however nothing else stands out.

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Erin Woo

We’re going by way of slides authorized by Holmes and despatched to the army for a 2012 burn examine. After many claims, Bostic asks Edlin whether or not he knew on the time whether or not this was true or not. Edlin says repeatedly he didn’t know, however he had no cause to doubt it. One exception: One bullet learn that almost all outcomes might be obtained in lower than 20 minutes, however Edlin testified that demo run occasions had been often longer than 20 minutes.

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Erin Woo

In the doc: “Theranos has created a point-of-service laboratory infrastructure that generates real-time data from a finger-stick of blood or other micro-volumes of different sample types delivering higher quality data than previously possible.” Also: “Each Theranos device can run every test currently available through the traditional centralized or hospital laboratory infrastructure.” Edlin testifies: “I had no reason to believe it wasn’t true.”

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Erin Woo

We at the moment are taking a look at a doc that was despatched to Major Steven Cook. “Everything in this document was reviewed and approved by Elizabeth,” Edlin testifies. Holmes was extremely concerned in each dialogue/e-mail communication he had with the army, he says.

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Erin Woo

Switching matters to Theranos’s interactions with the army. Edlin helped assist Theranos’s army and D.O.D. relationships. “The end goal for these communications was to set up a research program that would compare Theranos testing to the testing available to the military.”

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Erin Woo

Edlin testifies that he doesn’t bear in mind Holmes asking him to take out language like this from investor binders, and says that he remembers displays like this being despatched to different buyers as properly.

Erin Woo headshot

 

Erin Woo

Under the heading “Same Tests, a Whole New Approach”: “The actionable information you need, 1/1000 the size of a typical blood draw.” This web page additionally says “the highest levels of accuracy and precision.” Theranos’s legal professional flagged this language at the side of the web site.

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Erin Woo

Included in a binder despatched to Rupert Murdoch: “Theranos’s proprietary, patented technology runs comprehensive blood tests from a finger-stick and tests from micro-samples of other matrices, and generates significantly higher integrity data than currently possible.”

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Erin Woo

Edlin testifies that he would put together binders for buyers. “Elizabeth asked to review them and once they were reviewed and approved … I would send them to investors,” he stated.

Erin Woo headshot

 

Erin Woo

Bostic reveals Edlin the purported Pfizer/Theranos examine report, however Edlin doesn’t know who created it or put the brand there, he testified.

Erin Woo headshot

 

Erin Woo

The advertising on Theranos’s draft web site included “a tiny drop is all it takes” and “highest level of accuracy.” In a four-page e-mail, Theranos legal professional Kate Beardsley raised accuracy questions on a few of this advertising, in some circumstances asking for substantiation or suggesting adjustments (i.e., “full range” to “broad range,” “highest quality” to “high quality”).

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Erin Woo

Edlin testifies that Holmes was “very involved and detail-oriented” in reviewing and approving Theranos’s advertising. “For the end product, and for what actually went onto the website, she did review that.”

Erin Woo headshot

 

Erin Woo

Dec. 27, 2015, e-mail from Holmes relating to a “VIP guest”: “You can say we do run those assays, but were not able to run them on this sample, apparently due to a human error in sample handling.” However: We simply noticed an e-mail from a Theranos scientist saying it was not human error. This e-mail was with regard to a Forbes author who deliberate on writing about his expertise.

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Erin Woo

Regarding these outcomes: Bostic enters a Jan. 7 e-mail from Tina Lin to Edlin, noting some points with the outcomes (some excessive, some low). “We have no sample for rerun since it was a short draw,” she wrote. Theranos started testing in wellness facilities over a yr in the past, Bostic notes.

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Erin Woo

Jumping forward to the Murdoch funding. Jan. 6, 2015, from Holmes: “I [sic] would be an honor to have you be part of our company.” Jan. 7 from Murdoch: “Thanks, Elizabeth. Enjoyed every minute of it. Any blood results? See you soon, Rupert”

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Erin Woo

Email from Edlin: “Unfortunately by the looks of the Thyroid panel results below it appears to have had major issues again.” Balwani: “To say this is deeply disappointing will be a gross under statement.” This was a few month earlier than the general public launch, Edlin testifies.

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Erin Woo

We’ve spent the morning up to now taking a look at completely different e-mail chains through which Daniel Young instructed Edlin to alter or take away irregular take a look at outcomes from demo studies. Holmes has been included on many of those emails.

Erin Woo headshot

 

Erin Woo

The jury is seated, and Daniel Edlin is again on the stand. We’re beginning once more with a recap of Theranos demos. Last Friday, we mentioned how they used the “demo app,” which shielded gadget failures from view, or the “null protocol,” which wouldn’t truly analyze the pattern.

Erin Woo headshot

 

Erin Woo

Good morning! I’m within the courtroom in San Jose. We’re beginning with Daniel Edlin, a former senior product supervisor at Theranos (and school buddy of Christian Holmes). Based on pretrial arguments, we’ll have former Pfizer diagnostics director Shane Weber subsequent.

Erin Woo headshot

 

Erin Woo

With that, we’re breaking for the weekend. We’ll choose up with Edlin on Tuesday.

Erin Woo headshot

 

Erin Woo

We’re taking a look at an e-mail chain between Edlin, Daniel Young, Michael Craig and others, getting ready for a tech demonstration. They determine to go together with the demo app, which “shields protocol failures from the client,” Craig wrote. If an error had taken place, it wouldn’t present on the display that an error had taken place. It would say operating or processing, Edlin stated.

Erin Woo headshot

 

Erin Woo

Edlin performed trainings for Walgreens workers and would give excursions round Theranos. “In advance of the tour, there were some areas of the labs that were hidden by a partition” to hide Theranos units, Edlin testifies.

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Erin Woo

Edlin was conscious on the time of Theranos utilizing modified third-party units to run venous attracts however didn’t know the third-party units had been used for fingerstick attracts till 2016.

Erin Woo headshot

 

Erin Woo

Edlin labored on the “front-end customer experience” for the Walgreens partnership, together with the shop’s branding and advertising in addition to software program utilized by sufferers and technicians. Edlin testifies that he was aware of the Edison machines (3.0 and three.5), the MiniLab, and the Edison 4 collection (the next-gen model of the Theranos units). The next-gen variations had been by no means used for medical affected person testing, he testifies.

Erin Woo headshot

 

Erin Woo

So far, Edlin has testified about Holmes’s work habits — she was within the workplace “all the time,” from early morning to late night and on weekends — and about how data was stored siloed inside Theranos, on directions from Elizabeth, Christian and Sunny.

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Erin Woo

Edlin was recruited to Theranos by Christian Holmes, who Edlin describes as “one of my closest friends.” He first met Elizabeth Holmes by way of Christian whereas Edlin and Christian had been at Duke.

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Erin Woo

Daniel Edlin, a former senior venture supervisor at Theranos from 2011 to 2016 who labored immediately with Holmes, is on the stand.

Erin Woo headshot

 

Erin Woo

After a break, we’re again in session. There could also be extra disruptions coming as much as the trial schedule: A juror’s mother-in-law handed away immediately and he or she could need to journey to the Midwest, and a good friend of Davila’s is critically sick.

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Erin Woo

Redirect is completed, and we’re again to re-cross. After some forwards and backwards on Dhawan’s assumptions that Theranos workers had been doing their jobs, Dhawan has been excused.

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Erin Woo

The authorities is asking about Lynette Sawyer. Dhawan says he didn’t meet Sawyer and doesn’t know whether or not she went into the lab or noticed the Edison. In basic, the federal government is working to point out that Wade’s line of questioning relied on assumptions.

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Erin Woo

We’re by way of cross and into redirect. Wade’s cross-examination stayed on the identical theme: that Theranos had loads of certified workers, and Dhawan’s minimal presence within the lab wasn’t a priority.

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Erin Woo

Wade is mentioning that Dhawan, as a part-time worker, delegated his duties to completely different full-time Theranos workers. “No one was pretending you were there every day,” Wade continued. “You were there as needed, right?”

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Erin Woo

Lance Wade is beginning with dialogue of Dr. Lynette Sawyer, who additionally served as a part-time lab director throughout this time. Dr. Sawyer didn’t come up throughout direct yesterday — Wade appears to be arguing that Dhawan didn’t do a lot as a result of Sawyer was dealing with extra of it.

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Erin Woo

After a juror overslept, we’re lastly beginning testimony in “Our Holmes Matter” in San Jose. We’re beginning once more with Dr. Sunil Dhawan, who grew to become lab director after Adam Rosendorff left.

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Erin Griffith

Motion to compel is denied, Parloff just isn’t required to show over his notes. Judge stated it doesn’t even need to get into the problem of reporter’s privilege as a result of the protection hasn’t made a robust sufficient case for it. “It’s a fishing expedition.”

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Erin Woo

We’re wrapping for the day. I’ll be again within the courthouse at 9 a.m. tomorrow when the trial resumes.

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Erin Griffith

Parloff counsel David Korzenik: “The trial is not about Mr. Parloff’s state of mind. It’s not a libel case against his subsequent article in which he corrected his first.” “He can only testify as to what Ms Holmes told him.”

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Erin Woo

Wade is asking about Dhawan’s interactions with Holmes and Balwani. Wade says that Balwani was operating the laboratory from an operational standpoint. Dhawan says he can’t touch upon that, however his assumption was that he was.

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Erin Woo

With quarter-hour to go at the moment, we’re beginning in on cross-examination. Wade (who spent days on the stand cross-examining Rosendorff) is begins by establishing that Dhawan is a extremely skilled skilled.

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Erin Woo

Dhawan says he doesn’t recall ever asking questions or asking a report back to be modified. He additionally signed a doc about reporting of important values with out ever seeing a important worth.

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Erin Woo

Rosendorff had signed the paperwork earlier than Dhawan did. “It gave me some reassurance that there had been some supervision before my time of arrival,” Dhawan testified. Dhawan signed the validation for the Edison with out ever seeing it run something.

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Erin Griffith

Also, “We want to show the information he was pointed to. It doesn’t matter if it turns out to be correct or incorrect.”

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Erin Griffith

Onto the Parloff matter. Cline says the Holmes camp needs to Parloff’s reporting notes with the intention to present that Parloff “was colored by bias — a desire to blame any errors he made in his initial article on Ms. Holmes rather than” his personal errors. Wow.

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Erin Griffith

The Justice of the Peace choose grants movement for the exclusion. “He’s testifying as to secondary things. He’s reporting and testifying about something someone else said or did that he covered. He really is akin to an expert witness who has collected information from many sources.” Carreyrou is now allowed to be within the courtroom.

Erin Woo headshot

 

Erin Woo

The Q.C. supervisor, Langly Gee, launched himself to Dhawan in August 2015. He wished Dhawan there for the CMS audit on 9/22/15. Dhawan stated he was there for the audit. Before that, he stated he signed “whatever was sent to me.”

Erin Woo headshot

 

Erin Woo

Dhawan didn’t go to Theranos each day. He went to Theranos twice. He didn’t work together with sufferers, physicians or Theranos lab workers. He by no means handled Q.C. He thinks he labored 5-10 complete hours from November 2014 to June 2015. For this, Dhawan was getting paid $5,000 a month.

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Erin Griffith

Cline: “I understand this is a hardship for Mr. Carreyrou. He’s not the only one suffering a hardship. Ms. Holmes’s father is a witness. We may call him. He’s having to miss the trial of his daughter.”

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Erin Griffith

Prosecution notes that it already introduced a movement to dam any arguments that there was coordination between the federal government and Carreyrou. Says there is no such thing as a proof of that and that Judge Davila already agreed to dam such arguments.

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Erin Griffith

Will the Holmes camp name Carreyrou as a witness? Holmes lawyer John Cline: “I can’t tell you at this point who we’re going to call as witnesses. We may. We may not put on a case. We may call Ms. Holmes. … I can certainly tell you we may call him.”

Erin Woo headshot

 

Erin Woo

As anticipated, we at the moment are calling Dr. Sunil Dhawan, a dermatologist who grew to become Theranos’s lab director after Rosendorff left. After a number of days on Theranos’s partnerships with different firms (Safeway, Walgreens), we’re now again to inside Theranos workings.

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Erin Woo

After transient re-cross from Downey, Jhaveri is excused.

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Erin Griffith

He provides that any subpoena issued to Carreyrou could be in unhealthy religion or harassing. One instance: “Ms. Holmes leading her employees in a chant that says F You, Carreyrou. Obviously I’m abbreviating that.”

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Erin Griffith

Carreyrou lawyer: “We believe he’s being singled out because of his prior reporting and because of the animus Ms. Holmes has for him.” Lawyer additionally says it’s a matter of First Amendment rights.

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Erin Woo

Schenk is up for redirect. He notes that the affected person expertise surveys had been earlier than they obtained their take a look at outcomes, so in the event that they, for instance, had been informed they weren’t pregnant however had been in truth pregnant, that might have an effect on their expertise however wouldn’t be counted in survey outcomes.

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Erin Griffith

Judge: “I’ve not been following Mr. Carreyrou’s podcast, but as I understand it he’s been able to report on what’s going on and comment on what’s going on.” Judge asks what’s the issue?

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Erin Griffith

On the Carreyrou matter, the Justice of the Peace choose recommended that he be categorized as an skilled witness, “a pragmatic solution,” he stated. Holmes facet stated (understandably?) that that doesn’t make plenty of sense.

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Erin Griffith

Defense has tried to compel Parloff to launch his notes. Some of them (outdated emails) not exist. But others would contain forcing him to show over notes and sourcing, and so on. He already offered some recordings of interviews to each side however is preventing the subpoena for notes.

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Erin Griffith

They’re additionally going to be coping with the motions involving Roger Parloff, who wrote a Fortune cowl story that’s actually being mentioned in trial at this second.

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Erin Griffith

While testimony is occurring, there may be additionally a separate Zoom listening to now with a Justice of the Peace choose, Nathanael Cousins, over whether or not the journalist John Carreyrou will likely be allowed within the courtroom.

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Erin Woo

Looking at a January 2015 affected person expertise survey abstract. Patients rated the general expertise as 4.81/5 — extra assist for Downey’s line of argument right here.

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Erin Woo

In basic, Downey appears to be taking a really affordable, pleasant tone with this cross-examination (in distinction, for instance, with the best way Wade began off cross with Rosendorff two weeks in the past). Main factors: opening shops is difficult, however sufferers had been pleased.

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Erin Woo

Downey is de facto making an attempt to focus on affected person satisfaction to point out that the partnership was successful. Jhaveri pushes again, saying that affected person expertise was one essential issue, however so was price of build-out, venous draw percentages, and so on. Jhaveri does concede that he doesn’t bear in mind getting detrimental suggestions concerning the exams being performed in venous draw type.

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Erin Woo

Other paperwork confirmed that Walgreens didn’t embrace venous draw percentages amongst “key program risks” and that Jhaveri informed Walgreens colleagues to not focus on future market enlargement plans exterior California and Arizona.

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Erin Woo

Downey highlights paperwork that make the case that the partnership was doing higher than the federal government painted it as. We noticed a set of Walgreens/Theranos assembly minutes saying that affected person expertise surveys had been “off the charts.”

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Erin Woo

Downey establishes that Jhaveri had little or no contact w Holmes; Jhaveri says he met together with her “two or three times at most.” (His essential level of contact was Balwani.)

Erin Woo headshot

 

Erin Woo

Back from break. Downey is beginning cross with questions on how opening shops is a troublesome job.

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Erin Woo

After studying the texts, the federal government completed its direct examination of Jhaveri. We’ll choose up with cross after the break.

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Erin Woo

Here’s the total doc with 36 pages of texts: https://www.documentcloud.org/documents/21081045-holmes-balwani-texts

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Erin Woo

Text messages between Holmes and Balwani about Walgreens! Jhaveri and Schenk are, for no matter cause, taking turns doing a dwell studying. (Jhaveri is Balwani; Schenk is Holmes. This does certainly really feel sort of like highschool English class.)

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Erin Woo

In 2015, venous draw percentages by no means went down sufficient to increase past 40 shops in Arizona and one in Palo Alto. Balwani’s clarification for the odds by no means modified. Then, in late 2015, Jhaveri testifies, he learn a detrimental article about Theranos. Walgreens stopped providing Theranos exams in 2016.

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Erin Woo

General theme of Jhaveri’s testimony to this point: Theranos wasn’t hitting its targets relating to venous draw percentages, however Jhaveri was keen to maintain working with them. But, the federal government notes: What Jhaveri didn’t know was that Theranos was not doing testing by itself units.

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Erin Woo

8/15/2014 e-mail from Jhaveri, the place he wrote that “we have made unbelievable progress in the short 5 months.” Jhaveri nonetheless believed that Theranos was doing testing by itself units, he testifies. In the identical e-mail, Jhaveri wrote that he needs to concentrate on enhancing affected person expertise and “venous percent in the 10% range.” At that time, it was nonetheless round 40%.

Erin Woo headshot

 

Erin Woo

Now taking a look at revised targets from August for the Theranos partnership. For F.Y. 2015, they had been now aiming for 200 shops as an alternative of 500, primarily based on the outcomes of the pilot. The venous draw percentages and the price of the buildout had been two causes for the decreased targets, Jhaveri testifies.

Erin Woo headshot

 

Erin Woo

In June 2014, Jhaveri nonetheless thought that Theranos was doing its testing on Theranos units. He didn’t know that Theranos was testing sufferers’ blood on modified third-party units. And nobody, together with Balwani, was happy with the venous draw percentages.

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Erin Woo

When Theranos did a finger stick draw, Walgreens thought that blood was being examined on a Theranos gadget. Walgreens didn’t comprehend it was being examined on a modified business gadget, Jhaveri testifies.

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Erin Woo

Walgreens agreed that some, extra advanced exams would possibly all the time require venous attracts, however these exams had been imagined to be much less widespread. A slide attributes the “higher number of venous draws so far” to “learning process around ordering patterns for Arizona,” not tech issues.

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Erin Woo

The share of finger stick attracts was “very important,” Jhaveri testifies. “That was the Theranos technology that we had signed a partnership on. … That was the actual magic that was so intriguing to us.”

Erin Woo headshot

 

Erin Woo

Patients may obtain conventional lab work by way of venous or finger stick take a look at. Traditionally, labs would do venous attracts. Theranos, as we all know, promised to do the identical exams on a small quantity of blood by way of a finger stick, which Jhaveri calls “extraordinary.”

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Erin Woo

At the time, Theranos was in a single retailer in Palo Alto and two in Arizona. They had been monitoring clients’ wait time and expertise degree. They had been additionally monitoring some lab measures, together with proportions of venous vs. finger stick exams.

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Erin Woo

Jhaveri was working to “operationalize” the Theranos partnership — increasing the partnership from the three shops it was in on the time. This included building, design, structure, coaching, buyer expertise.

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Erin Woo

In early 2014, he grew to become divisional vp of well being care providers, and the Theranos partnership grew to become a part of his duties presently.

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Erin Woo

He re-engaged with the Theranos crew on the finish of 2013. At that time, he was nonetheless engaged on the brand new pharmacy design and wished to determine how the Theranos partnership would match into the expertise/building of the shop.

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Erin Woo

He first heard of Theranos in 2010, when he was main a venture to revamp Walgreens pharmacies to be extra customer-centric. He met Holmes and Balwani when he gave them a brief tour of a Walgreens retailer.

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Erin Woo

Jhaveri labored at Walgreens for 29 years (1989-2018). He’s a registered pharmacist with an MBA in organizational administration.

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Erin Woo

We’re performed with direct examination. On cross (which takes roughly one minute), the protection establishes that Amenta didn’t have particular information of the wire transfers past figuring out that they occurred. And we at the moment are performed with Amenta and onto Jhaveri.

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Erin Woo

Prosecutor John Bostic is taking Amenta by way of federal wire transfers despatched to Theranos, presumably to point out that wire transfers had been made.

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Erin Woo

Jurors have filed in. Amenta is on the stand.

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Erin Woo

Back within the courtroom for a particular Thursday version of the Elizabeth Holmes trial! Today’s anticipated witnesses: Robert Amenta, deputy chief investigator on the Federal Reserve Bank of New York; Nimesh Jhaveri, a former Walgreens government; and Dr. Sunil Dhawan, a former Theranos lab director.

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Erin Griffith

That’s it for at the moment. There will likely be trial tomorrow and one of many witnesses will likely be Nimesh Jhaveri, former head of well being care providers at Walgreens.

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Erin Griffith

The subsequent witness is Robert Amenta, deputy chief investigator on the New York Federal Reserve. We simply walked by way of an evidence of what the Fed does. U.S. Attorney John Bostic: “So it’s a bank for banks.”

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Erin Griffith

In 2015, after the WSJ Theranos expose, Miquelon wrote an e-mail to Holmes: “You are in my thoughts, hang in there. The haters are everywhere but your contribution to the world cannot be bottled up.”

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Erin Griffith

Defense makes the case that Walgreens entered into its settlement with Theranos figuring out it didn’t have F.D.A. approval. Walgreens had the fitting to terminate the partnership if Theranos didn’t get F.D.A. approval by the tip of 2010. (It didn’t, and Walgreens didn’t terminate.)

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Erin Griffith

On diligence, Miquelon says: “I would define diligence as unfolding over a couple of years — diligence continues and that’s one reason why you have a revised agreement and addendums to that.”

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Erin Griffith

Downy made the purpose that lots of the guarantees Holmes made about Theranos’s know-how had been made when the corporate deliberate to place machines in shops. Idea being that these guarantees are irrelevant as a result of Theranos determined to not put machines in shops, however take a look at in its personal lab.

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Erin Griffith

On cross-exam, Holmes lawyer Kevin Downey is increase how large of a deal this effort was to Walgreens. Miquelon stated Walgreens employed a agency to give you a listing of 180 start-ups engaged on lab improvement, which the corporate evaluated.

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Erin Griffith

The payment hinged on the partnership hitting sure milestones, however in August 2013, Holmes emailed Walgreens asking to speed up the fee and ship the cash sooner.

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Erin Griffith

WOW this is perhaps public data however I wasn’t conscious of it. Walgreens paid a $100 million “innovation fee” to Theranos for the privilege of partnering with them. The precise funding in fairness solely got here within the type of a $40 million convertible notice.

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Erin Griffith

🩸 After a two-hour delay brought on by jurors elevating points about their questionnaires being made public, testimony within the Elizabeth Holmes trial (or, per the choose, “Our Holmes Matter”) is starting with Wade Miquelon, former C.F.O. of Walgreens.

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Erin Griffith

Miquelon describes the artwork of credibility buying and selling — in an e-mail promoting Theranos to his colleagues he notes Larry Ellison’s endorsement. The prosecutors additionally make the purpose that Theranos was seven years alongside — pre-empting the “just a young start-up” protection.

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Erin Griffith

We’ve seen a number of paperwork from pharma firms endorsing or validating Theranos’s know-how. I consider these are the identical ones we noticed within the opening arguments, which had been a fairly large smoking gun. The testimony hasn’t but mentioned whether or not they had been falsified.

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Erin Griffith

Miquelon gives a really acquainted story by now: He was excited by the promise of Theranos’s know-how. Lots of low-cost exams on a finger stick of blood. We additionally know by now that witnesses should be very particular concerning the claims Holmes made as a result of protection will choose them aside.

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Erin Griffith

The subsequent witness is the previous Walgreens C.F.O. Wade Miquelon (now C.E.O. of Jo-Ann Stores).

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Erin Griffith

Burd attracts the road at income and profitability. “If you’re hitting strong revenue dollars relative to size and you’re making money, I would say you’re on your way.” (If that they had requested me, I might have outlined a start-up as a non-public venture-capital backed firm.)

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Erin Griffith

On redirect we focus on the definition of a start-up, rebutting protection’s declare that Theranos was only a tiny upstart coping with a giant unhealthy company. “Do you differentiate between a start-up that is 7-10 years old vs one that is just starting out of a garage?”

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Erin Griffith

Downey making an attempt to make the case that Safeway’s inventory had had a giant drop between previous to Burd leaving. He doesn’t take that bait. “In 20 years, that happens frequently.”

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Erin Griffith

We commute over the Theranos lab arrange as a take a look at on Safeway’s company campus. Burd was annoyed that it was imagined to have a “box,” one among Theranos’s blood analyzers, however for “secrecy” causes, didn’t get one. Eventually it was shut down.

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Erin Griffith

Downey has grilled Burd on the authorized particulars of their partnership that gave Safeway exclusivity rights, paybacks, and so on. on whether or not there was ever a tough deadline given for the launch.

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Erin Griffith

Plenty of concentrate on the diligence that Safeway did on Theranos and its know-how. Burd spoke with numerous medical doctors and lab administrators at Johns Hopkins, who stated that they had not had the Theranos machines lengthy sufficient to validate them. “The box was taken back by Theranos.”

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Erin Griffith

Kevin Downey, Holmes’s lawyer, is now cross-examining Burd. Building up all his expertise, experience, sophistication, and so on., to check with Holmes and Theranos. “You knew at the time that she was a very young entrepreneur. … And you knew the company was a start-up?”

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Erin Griffith

Just e-mail after e-mail from Burd to Holmes expressing disappointment. “We are so good together when we collaborate, but I have never been more frustrated. I want to help, but you are making it difficult.”

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Erin Griffith

Burd emailed Holmes: “I can recall getting discouraged once is (sic) the last 61 years. That said I am getting close to my second event.” Do C.E.O.s all the time e-mail one another this manner?

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Erin Griffith

Burd emailed Holmes complaining about delays on launching Theranos exams inside Safeway shops. “I feel like a jogger running in place waiting for the stop light to turn green.” Another e-mail has the topic line “Becoming Discouraged.”

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Erin Griffith

Burd emailed Holmes in 2012 expressing issues a few Theranos lab on Safeway’s campus. “I am genuinely concerned that Safeway’s lab reputation gets worse by the day.” He warned that if the issues continued for the comfortable launch, “both our brands will be at risk.”

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Erin Griffith

The choose known as the case “Our Holmes Matter” which I’m going to start out utilizing. Steve Burd, the previous C.E.O. of Safeway, is again on the stand for direct examination.

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Erin Griffith

🩸 In courtroom once more for U.S. vs. Holmes.

Erin Griffith headshot

 

Erin Griffith

Thus concludes the Theranos trial motion for the week. The trial is on recess on Friday, will likely be again on Tuesday.

Erin Griffith headshot

 

Erin Griffith

He continues: “I’ve had the privilege of meeting four U.S. presidents. When the president is in the room — let me tell you, the president owns the room. No one talks unless spoken to. Her style was warm, it was friendly. It wasn’t dictatorial.”

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Erin Griffith

Burd is very complimentary of Holmes. “Not all C.E.O.s are alike. She would rise to the top of the pile in terms of vision, in terms of command of the information, clearly in terms of delivery. She was always decisive.” “Whenever she was talking she owned the room.”

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Erin Griffith

Safeway initially negotiated an $85 million partnership with Theranos, together with investing $30 million to put in labs in its shops, which he stated turned out to be a low estimate. The deal was negotiated immediately with Holmes with no attorneys, which Burd discovered was uncommon.

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Erin Griffith

Now discussing convertible fairness notes! Isn’t that is a lot extra enjoyable than chemiluminescence and assays. 📈

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Erin Griffith

Ooooooooh I feel we simply obtained our first point out of EBITDA within the trial, I can see the fun of studying about accounting on the faces of those jurors.

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Erin Griffith

For some cause he’s speaking a few pressure of watermelon known as a Pureheart that has a really small rind that Safeway offered solely for a yr. 🍉

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Erin Griffith

Rosendorff’s testimony is lastly over. Steve Burd, the C.E.O. of Safeway for 20 years till 2013, is now testifying. When he heard about Theranos he was “immediately interested in meeting Theranos, particularly the founder.” “It was a fascinating concept.”

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Erin Griffith

Defense counsel Wade is sort of giddy to argue that prosecution requested Dr. Rosendorff to check points at Theranos to different labs he labored at. Defense needs to be allowed to convey up different investigations at labs the Rosendorff later labored at, he says.

Judge Davila says no, that might be a separate “mini trial.” He provides, “I think it may actually enhance the damage you’re seeking to avoid but, hey, it’s your case.”

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Erin Griffith

Regarding the accusation that he stole commerce secrets and techniques by emailing himself recordsdata, prosecution asks, “Based on what you know about Theranos’s methods, would you have wanted other labs to use those methods?” “No.”

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Erin Griffith

For the final hour we’ve been listening to redirect on Dr. Rosendorff. For these counting, that is Day 6 of his testimony. The cause he left Theranos: “It was about patient care and my integrity as a physician.”

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Erin Griffith

Now the alternate has comparable issues, saying English just isn’t her first language and is anxious she “could make a mistake in something.” “It’s her future.” The choose doesn’t appear to be having this one.

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Erin Griffith

The juror stated she doesn’t consider in punishment and has been more and more haunted by the considered having a task in sending somebody to jail. Not surprisingly, prosecution was in favor of dismissing her.

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Erin Griffith

I’m beginning to really feel like an Oompa Loompa watching the jurors drop out from the sidelines right here, possibly the press corps will put collectively a little bit tune and dance.

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Erin Griffith

💉 U.S. v. Holmes, Day 12 of ~2384972: We have dismissed a juror who says her views as a Buddhist will make it unimaginable for her to vote to convict. Three of 5 alternates stay. Later at the moment Steven Burd, the previous C.E.O. of Safeway, will testify.

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Erin Griffith

QC failure, immulite reagents, clia lab, advia, HCG, PSC, assays, vacutainers, nanotainers, we’re nearing the tip of Day 5 of Dr. Rosendorff’s testimony and so very deep within the blood testing weeds please ship assist

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Erin Griffith

Judge Davila now says that protection has had 4 days to problem Rosendorff’s testimony and says “You have challenged his confidence.” Allows protection to query about Rosendorff’s work post-Theranos, says to “probe lightly” to keep away from legal responsibility or impeding his future profession.

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Erin Griffith

Interesting type of questioning asking the witness “You don’t recall those times when you lied and again and again?” “…No sir?”

Erin Griffith headshot

 

Erin Griffith

Rosendorff despatched himself a bunch of inside Theranos emails earlier than he left. Wade accuses him of stealing commerce secrets and techniques and violating HIPAA with affected person information.

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Erin Griffith

Wade continues to drive on the level that Dr. Rosendorff left Theranos for extra money and the rationale he expressed issues about its lab outcomes and requested to be faraway from its Clia lab was to start out his new job sooner.

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Erin Griffith

Now Wade is making an attempt to make use of Rosendorff’s resignation e-mail — the fakest e-mail any worker ever writes — towards him. “You wrote that it was a ‘tremendous experience’ and you ‘appreciated the opportunity to work with so many talented individuals’” Gotcha!

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Erin Griffith

Wade is making an attempt to make a giant deal about how Dr. Rosendorff’s subsequent job after Theranos paid him extra. Dr. Rosendorff just isn’t having it. “I wanted to join a reputable company whose mission I believed in.”

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Erin Griffith

Defense reveals a résumé Rosendorff was sending round and factors out that he stated he did nice work at Theranos. Rosendorff: “I don’t know if you’ve ever tried to apply for a job but it doesn’t serve you” to debate “fraudulent activity.” Defense strikes his reply.

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Erin Griffith

Dr. Rosendorff was additionally taking a look at different jobs earlier than Theranos ever launched. Defense: “You essentially had a foot out the door the whole time?” “On occasion I would look at what other jobs were available.”

Erin Griffith headshot

 

Erin Griffith

Back from a break. Defense asking Dr. Rosendorff about his departure from Theranos. Defense factors out that Rosendorff was contemplating submitting a qui tam lawsuit towards Theranos, to alert the federal government of wrongdoing (and get a % of the cash recovered).

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Erin Griffith

Defense counsel Wade reads from a deposition through which Rosendorff seems to contradict his testimony concerning the frequency of issues at Theranos labs. “Problems come up in labs — every lab in America, probably every lab in the world — is not going to perfect, correct?” “Yes”

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Erin Griffith

Binder hijinks. While flipping by way of all the varied emails Rosendorff asks somebody to assist him with the binder as a result of “it’s just opened up and it’s just [hand wave motion] pages everywhere.”

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Erin Griffith

In the meantime Roger Parloff has filed a declaration opposing protection’s push to compel him to show over his notes in reporting the 2014 Fortune cowl story about Holmes and Theranos. He already offered each side recordings of his on-record interviews with Holmes and Balwani.

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Erin Griffith

Rosendorff takes off his glasses and rubs his eyes as Wade cycles by way of numerous varieties displaying his signoff on assay validation from 2013.

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Erin Griffith

The supposed takeaway from the road of questioning, so far as I can inform, is that some exams at Theranos in some unspecified time in the future did work and that when there have been issues, many individuals at Theranos tried to repair them.

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Erin Griffith

Lance Wade, protection counsel, has resumed his aggressive questioning of Dr. Rosendorff, getting deeply into the weeds on his function in setting Theranos’s lab insurance policies and QC testing with numerous emails.

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Erin Griffith

Judge Davila responds with a light-weight dig towards protection: “A couple of blue suits sitting next to them in a judge’s chambers, what could be intimidating about that?” 👔

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Erin Griffith

A media coalition (together with NYT) has argued to unseal the juror questionnaires since we had little visibility into the ultimate choice course of. The choose plans to privately query every juror about what they may wish to redact and protection says they wish to be there, to which the choose responds that that might be unnecessarily intimidating. Defense disagrees.

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Erin Griffith

Judge Davila stated a journalist contacted a health care provider who contacted the courtroom clerk to level out that one of many protection’s displays included a affected person’s actual identify, which is a HIPAA violation.

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Erin Griffith

Holmes is right here in fact with Billy Evans, her mother and an older man I can’t ID. Before the jury arrives, the attorneys are arguing about whether or not they can focus on issues at firms that Dr. Rosendorff labored for after Theranos.

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Erin Griffith

🩸 Back within the courtroom for U.S. v. Holmes. 🩸 The clerk is checking courtroom tickets after a number of guide golf equipment confirmed up final week. Cross-examination of ex-lab director Adam Rosendorff continues.

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Erin Woo

With that, we’re breaking for the weekend. Court will resume on Tuesday.

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Erin Woo

The authorities asks how lengthy Wade goes to take with cross-examination, provided that they’ve out-of-state witnesses they wish to name subsequent. Wade says he expects it’ll take all day Tuesday. (As a reminder, the general public doesn’t usually get data on what witnesses are coming subsequent.)

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Erin Woo

7/19/14 e-mail from Rosendorff to Balwani defending Theranos’s exams in response to doctor complaints. “I was emphatic with Dr. Chen about our rigorous validation and quality process,” Rosendorff wrote. He testifies that he believed this on the time.

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Erin Woo

With 5 minutes left earlier than we’re scheduled to interrupt for the weekend, we at the moment are discussing customer support. Rosendorff notes that by the point complaints had been escalated to him, they had been often critical points.

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Erin Woo

Wade actually hammering dwelling this level on outlier elimination (which is sensible — that is one thing that got here up so much in earlier testimony for example of Theranos manipulating outcomes).

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Erin Woo

Wade is urgent Rosendorff to say he authorized of this. “I thought it was unusual,” Rosendorff stated. After reminding Rosendorff of what he stated in his deposition, Rosendorff concedes that he authorized it.

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Erin Woo

Now onto one thing known as the “six tip policy,” the place there are six outcomes from one pattern. Two outcomes may be discarded, and also you common the opposite 4. Young developed this course of. Rosendorff says there was no formal SOP about outlier detection.

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Erin Woo

6/4/14 e-mail from Young, saying that they’re holding the outcomes of a examine after talking with Rosendorff — presumably supporting Wade’s line that Rosendorff is now within the loop.

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Erin Woo

In a 6/4/14 e-mail from Rosendorff, he wrote a HCG plan for Balwani and Young which stated HCG ought to change to vacutainer attracts and run on immulite. Wade notes that Rosendorff is “in the loop now.”

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Erin Woo

Young replies that he up to date Adam over the weekend and agrees that “they should be running all decisions by Adam.”

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Erin Woo

Looking at 6/3/14 e-mail from Balwani to Young: “Adam came by my office EXTREMELY frustrated that as a lab director he is not being kept in the loop.” “This information has to go through him. … Can you guys please touch base with Adam so he is in the loop,” Balwani provides.

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Erin Woo

Wade asks if Rosendorff stands by his testimony that he didn’t meet with Holmes about HCG on this time interval. Rosendorff says sure.

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Erin Woo

5/30/14: e-mail from Holmes’s assistant the place she writes that “Elizabeth has asked me to coordinate a CLIA meeting for this afternoon at 4 p.m.”

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Erin Woo

Now seeing Holmes’ calendar for five/29/14, the place she has “meeting with Adam Rosendorff” listed. Rosendorff had testified that he had not met with Holmes.

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Erin Woo

We’re now constructing a timeline being proven to the jury about HCG points, together with numerous emails and displays.

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Erin Woo

Wade had Rosendorff verify that he testified Holmes was much less involved than he was concerning the HCG points. Then, he confirmed a 4:45 p.m. e-mail forwarded from Balwani to Holmes about HCG points. Holmes responded six minutes later, asking, “How did that happen?” Wade then strikes on.

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Erin Woo

We’re again from break and switching gears to speak about HCG, the being pregnant take a look at.

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Erin Woo

On 10/15/14, Balwani gives one other assembly, however Rosendorff’s response signifies that he doesn’t want the opposite assembly.

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Erin Woo

Wade now discussing how Daniel Young despatched a draft Q.C. coverage forward of the assembly, though that was Rosendorff’s accountability. Wade additionally notes that there have been no restrictions on what Rosendorff may focus on in the course of the assembly.

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Erin Woo

Wade can also be making an attempt to point out that Theranos DID take Rosendorff’s issues severely. On 10/9/14, Balwani emailed Rosendorff, establishing a gathering to debate his issues. Balwani tried to set it up for the following day, however Rosendorff requested for it to be delayed.

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Erin Woo

In at the moment’s cross-examination, Wade appears to be making an attempt to poke holes in Rosendorff’s credibility — mentioning occasions when he was gradual to reply to medical doctors, and noting that there was an AAP in place for proficiency testing, opposite to the impression given in earlier testimony.

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Erin Woo

Wade asks if something was occurring to make Rosendorff gradual to reply. Rosendorff: “I was becoming frustrated at my inability to explain discrepant results.” Wade presses him that he simply wanted to name the physician again.

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Erin Woo

We’re now seeing one other e-mail from a health care provider saying he’s ready for a callback from Rosendorff. Wade makes the purpose that that is the second time every week had handed earlier than returning a health care provider’s name. Rosendorff says he had already spoken with him and didn’t notice one other name was wanted.

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Erin Woo

Email from Rosendorff after speaking to the physician: The physician is “puzzled” concerning the outcomes, however “the MD is extremely positive and excited about Theranos and wants us to ‘crush Quest Diagnostics.’”

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Erin Woo

There’s a ten/10/14 e-mail from a customer support rep to Christian Holmes a few affected person who redid her labs at Stanford and obtained very completely different outcomes.

Christian responds to say they’ll repeat the exams and loop Rosendorff in. Rosendorff was looped in as instructed, however now there’s a followup e-mail to Rosendorff! Every week had passed by, and he hadn’t returned the telephone name concerning the affected person.

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Erin Woo

So far this morning, Wade’s cross has consisted of going by way of e-mail chains discussing proficiency testing, seemingly to ascertain that Theranos did have a rigorous proficiency testing protocol in place.

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Erin Woo

We’re beginning off with proficiency testing. Wade will get Rosendorff to agree that he did write a regular working coverage for another evaluation protocol for proficiency testing.

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Erin Woo

Court is in session for the fourth (!!) day of testimony by the previous Theranos lab director Adam Rosendorff. (This is the longest any witness has been on the stand to this point.)

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Erin Woo

There is not any redirect, and Sung has been dismissed. Court is on recess till Friday.

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Erin Woo

The protection ended on the contract between Celgene and Theranos. Cline stated that the entire “success milestones” had been achieved, and funds had been made, though Sung stated she didn’t have direct information of the fee.

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Erin Woo

John Cline is doing the cross-examination for the protection. He’s beginning by going again by way of the chronology we coated in direct.

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Erin Woo

And now we’re onto cross! This was a really quick direct examination.

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Erin Woo

Sung didn’t inform anybody that Celgene had comprehensively validated Theranos’s know-how.

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Erin Woo

4/2/12 e-mail from Sung to Daniel Edlin, with Holmes and Young copied. “We thought it would be great to keep her in the loop and aware of ongoing activities,” Sung stated. The e-mail says Celgene “had decided to simply wait until your next-gen machines are ready and then deploy them”

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Erin Woo

In extra unhealthy information for Theranos, imply focus profiles weren’t constant between Theranos and QPS, and focus variability was greater with Theranos than with QPS methodology. Once once more, Sung confirms that focus variability is undesirable.

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Erin Woo

We’re taking a look at a scatter plot displaying the vary the place Theranos exams ought to fall. Most of them … don’t fall inside this vary. 67% of samples had >25% distinction in serum focus between Theranos and QPS methodology. “It’s not good news” for Theranos, Sung stated.

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Erin Woo

Theranos complete blood information confirmed extra fluctuations, which Sung stated was undesirable.

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Erin Woo

Theranos additionally had greater variability. Government requested if that was good or unhealthy. Sung chuckled and replied: “Bad.”

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Erin Woo

14.1% of Theranos samples didn’t have usable outcomes, in comparison with lower than 2% for QPS.

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Erin Woo

We can see a comparability between Theranos and QPS assays. Theranos solely used .25mL of blood in comparison with 2mL for QPS. Theranos additionally used complete blood moderately than serum, which Sung stated was “very nice.”

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Erin Woo

7/20/10 e-mail from Sung to Holmes saying they weren’t capable of validate Theranos’s exams. The outcomes had been “close” in some circumstances however not adequate.

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Erin Woo

She had visited Theranos and thinks she met Holmes whereas she was there. She noticed a Theranos gadget whereas she was there and stated it appeared like an oven. The concept you possibly can do one thing so small and environment friendly on website was a “great idea,” she thought on the time.

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Erin Woo

Celgene entered into an association with Theranos. Her understanding was that Theranos was growing a platform to research the endpoints. She thought they may do it effectively with a really small quantity of blood, which might be a “huge advantage.”

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Erin Woo

We’re beginning her testimony in 2009, when she labored on a drug known as ACE-011 being developed for therapy of anemia and bone loss. Her function was to recommend proteins within the blood to measure that might recommend whether or not the drug was working (e.g., hormones).

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Erin Woo

Dr. Sung obtained a Ph.D at Georgetown after which did a postdoc at Stanford earlier than going into business. She labored in numerous biotech corporations, together with Celgene, which was later purchased by Bristol Myers Squibb. She’ll be testifying about her work at Celgene.

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Erin Woo

We’re again in session. The authorities is asking Dr. Victoria Sung. (Rosendorff will choose up on Friday.)

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Erin Woo

After a protracted dialogue of an e-mail chain about proficiency testing, Rosendorff is completed with testimony for at the moment. (He has a battle this afternoon.) We are going to take a 20 minute break after which choose up with a unique witness for the remainder of the afternoon.

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Erin Woo

Now taking a look at a doc from the American Proficiency Institute that offers “Acceptable” scores to the entire proficiency exams.

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Erin Woo

Looking now at an e-mail from Rosendorff: “We are continually doing proficiency testing.” Rosendorff testifies to make clear that this was predicate testing.

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Erin Woo

After taking a look at his 2016 testimony (within the binders!), Rosendorff says he nonetheless doesn’t bear in mind telling the federal government that. “I assume the record is correct,” he says.

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Erin Woo

We’re now again to the place we began yesterday, discussing Rosendorff’s contact with the federal government. Wade asks Rosendorff if he remembers telling the federal government that Theranos machines used different evaluation proficiency to measure accuracy. Rosendorff says no.

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Erin Woo

Rosendorff beforehand testified there was no formal proficiency testing processes in place. After Wade challenges him, Rosendorff clarifies: There was proficiency testing for predicate testing (business exams), however not for Theranos exams

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Erin Woo

Looking at a top quality techniques presentation for 2014 from Langly Gee, Theranos’s high quality management supervisor. Wade is displaying failure charges for Edison high quality management exams. “Something’s not squaring up,” Rosendorff says — these failure charges are decrease than he thought they had been.

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Erin Woo

Wade is continuous on this line of questioning, noting that Rosendorff testified about issues in June 2014 however signed validation studies in Aug. and Sept. 2014.

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Erin Woo

Rosendorff testifies that he wouldn’t have continued signing validation studies for Theranos’s blood testing gadget, the Edison, if he thought it was unreliable.

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Erin Woo

We’re again from break! And on to a different Edison validation report.

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Erin Woo

We’re going by way of a Sept. 2013 validation report on the Edison for TSH, a thyroid take a look at. This doc, with Rosendorff’s signature, validates the take a look at for affected person use. Wade is strolling Rosendorff web page by web page by way of the report.

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Erin Woo

Rosendorff testifies that he by no means informed the CLIA crew to cease utilizing the Edison take a look at altogether, however did on some particular exams.

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Erin Woo

Wade is now noting that Rosendorff was among the many highest-paid workers at Theranos. Rosendorff says that he thought he ought to have been paid extra, given Theranos’s issues, however that is stricken from the file.

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Erin Woo

Rosendorff says he had issues about QC. Wade says he was paid to have issues. “That’s why you get paid the big bucks.” Rosendorff replies: “Not as big bucks as you get paid.” Cue the largest giggle of the trial up to now.

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Erin Woo

Wade is making a degree he’s made earlier than, that high quality management samples aren’t affected person samples — noting that “nothing bad happens” to sufferers if a QC take a look at fails.

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Erin Woo

We at the moment are on to a mid-Jan 2014 e-mail from Rosendorff to the CLIA lab crew asking them to check with very detailed quality-control insurance policies.

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Erin Woo

Balwani’s response: “I spoke with the teams today and they are all going to put in long hours and do whatever it takes to get this done tomorrow.” Rosendorff testifies: “I had many many battles with Sunny about what was needed versus what he was prepared to allow.”

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Erin Woo

Rosendorff added: “I do feel that it was very difficult to get answers from Daniel’s team.” In a later e-mail, Rosendorff doubles down on needing the specificity research: “No they are required. Very important in fact.”

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Erin Woo

From the e-mail chain. Balwani: “As we know, we take these issues with seriousness. Why didn’t you raise these before to me when I was asking for any issues for months?” Rosendorff: “My apologies for the late feedback regarding our readiness …”

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Erin Woo

Notable frustration from Rosendorff after he tries to make a degree and Wade cuts him off: “I’m just reading emails and saying, yes, that’s what’s happening here.”

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Erin Woo

We’re now onto dialogue of the Walgreens launch. In a 11/10/13 e-mail to Balwani, Rosendorff flagged points that wanted to be addressed earlier than the Walgreens launch. Wade is strolling him by way of the e-mail chain with Balwani, level by level.

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Erin Woo

After many questions establishing that Rosendorff didn’t cover Normandy lab from the inspectors, Wade notes that the inspection discovered “minor deficiencies.” Rosendorff says that Holmes and Balwani had been upset that there have been deficiencies and {that a} clear report would have been “ideal.”

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Erin Woo

Wade is making an attempt to make the purpose that this was to protect commerce secrets and techniques. Rosendorff says this doesn’t make sense, asking who would pin commerce secrets and techniques to a bulletin board.

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Erin Woo

We’re wanting once more on the e-mail from Elizabeth Holmes about strolling the auditors by way of the lab. We’re now seeing the response: “All of the bulletin boards from the lobby to HR were covered with paper so the inspector could not view any of the drawings or items on the boards.”

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Erin Woo

Wade is beginning by asking questions concerning the Dec. 2013 CA Dept. of Public Health audit that we mentioned yesterday. Wade’s going by way of a doc itemizing preparations for the audit as he tries to ascertain that Rosendorff had accountability right here.

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Erin Woo

Court is in session for one more day of the Elizabeth Holmes trial! We’re persevering with with the cross-examination of former Theranos lab director Adam Rosendorff, which protection legal professional Lance Wade expects to take all day.

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Erin Woo

Rosendorff requested for a loo break, and we’re as an alternative ending for the day! Will choose again up at 9 a.m. Pacific Time tomorrow.

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Erin Woo

Important content material: The custom-built laboratory data system was named Super Mario. (Other enjoyable names: Jurassic Park = the lab with the entire normal machines, Normandy = the lab with Theranos machines.)

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Erin Woo

Cross examination has been a lot slower and calmer now that we’re again from break. Less urgent Rosendorff to reply particular questions and extra jokes.

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Erin Woo

Wade is holding up a duplicate of the guide and speaking concerning the significance of its PR and advertising efforts, in addition to its secrecy.

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Erin Woo

Rosendorff learn Walter Isaacson’s Steve Jobs biography and favored the thrill of Silicon Valley, which helped lead him to Theranos. (That Steve Jobs biography was a favourite of Holmes’s, too.)

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Erin Woo

We’re again from break! And we’ve taken a giant step again in time — now wanting on the resume Rosendorff despatched Theranos when he utilized in 2013.

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Erin Woo

We’re now going forwards and backwards on who was concerned within the R&D course of. Rosendorff says he was not conscious on the time if Holmes was concerned with R&D. Per the grasp validation plan, Rosendorff needed to log out on every assay earlier than it may well go into validation.

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Erin Woo

We’re going by way of what exams had been supplied in the course of the family and friends launch. The solely exams run by way of 9/28/13 had been two that didn’t run on the Edison, Rosendorff confirms. The first Edison-based take a look at, TSH, a measure of thyroid operate, was run 10/17/2013.

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Erin Woo

Wade additionally retains having Rosendorff learn his personal testimony, silently, to himself. That’s taking place once more now.

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Erin Woo

In the e-mail, Balwani writes, “We feel confident we can handle ~30 samples/day from this location at this point. And it has been 2 months since we have been out in WAG [Walgreens]. It’s time to go live.” Wade now making an attempt to make the purpose that that they had not beforehand been dwell.

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Erin Woo

Found it! We at the moment are taking a look at an 11/7/13 e-mail from Balwani to Rosendorff about opening their Palo Alto/Uni Ave location to the general public on the approaching Monday. It had beforehand solely been open to associates/household.

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Erin Woo

We at the moment are, as soon as once more, looking for the right pages within the MANY binders the protection gave Rosendorff.

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Erin Woo

Wade is now saying that Rosendorff testified earlier to a grand testimony that it was a “limited friends and family” however didn’t accomplish that on Friday.

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Erin Woo

We at the moment are on to the business launch. In an e-mail that we noticed in direct, Rose Edmonds (a improvement scientist) says that not one of the assays are utterly via validation testing. Rosendorff had testified that is vital as a result of they had been only a week from launch.

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Erin Woo

Wade gave a hypothetical the place Rosendorff had rotten meals in his workplace, and subordinates complain to Balwani. Rosendorff continued to appear confused, and Wade is now shifting on.

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Erin Woo

We at the moment are … asking about firm hierarchy? (Rosendorff reported on to Balwani, and Young was additionally above him.) “Are there ever circumstances where it’s appropriate for senior management to have discussions about a subordinate?” Wade asks. Rosendorff appears confused.

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Erin Woo

Rosendorff additionally served as Theranos’s medical marketing consultant. Holmes wouldn’t qualify for this both.

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Erin Woo

Wade is asking about Holmes’s schooling. Famously, she dropped out of Stanford. “Based on your understanding of her background, would she be qualified to be a CLIA supervisor or lab director? Rosendorff: “No, definitely not.”

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Erin Woo

Wade says, and Rosendorff concedes, that in the end it was Rosendorff’s accountability if the exams failed and his accountability to implement high quality management insurance policies and proficiency exams.

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Erin Woo

Rosendorff is agreeing with Wade’s questioning that Holmes by no means informed him to report an inaccurate consequence, and that Holmes by no means directed him to not pause or discontinue exams he thought had been inaccurate.

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Erin Woo

Wade: “Did you ever use a test on patients that you believed was inaccurate or unreliable?” Rosendorff: “No.” Did he ever present outcomes that he believed to be unreliable? “No.”

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Erin Woo

Wade: “Did you faithfully dispatch your legal obligations as lab director at Theranos?” Rosendorff: “Yes, I did.” Wade: “Did you offer lab tests that you knew at the time were inaccurate or unreliable?” Rosendorff: “No … I ordered the laboratory to cease testing.”

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Erin Woo

Two themes of cross to this point: Wade appears to be making an attempt to show that Rosendorff labored with the federal government in shaping his testimony, and is hammering dwelling that Rosendorff was legally and ethically liable for the lab.

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Erin Woo

Rosendorff confirms that he was aware of the laws. Wade is now asking a collection of questions on Rosendorff’s obligations: “You are required to…?” Rosendorff says these are his obligations, however “I received pushback from management.”

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Erin Woo

Wade is now holding up a stack of papers (possibly an inch thick?) and asking if Rosendorff knew all of these laws, presumably the stack of papers he’s holding. Davila, the choose: “You’re asking to admit the entirety of this document? It’s how many pages? 122?” It’s admitted.

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Erin Woo

We’re into Rosendorff’s time at Theranos! Wade requested him if being the CLIA lab director meant he was legally liable for what occurred within the lab, and Rosendorff stated sure.

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Erin Woo

Wade is continuous to attempt to choose aside the prosecution’s case, noting that they didn’t go in chronological order by way of the paperwork. He nonetheless hasn’t actually requested about Rosendorff’s precise experiences at Theranos.

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Erin Woo

Wade is arguing that Rosendorff’s testimony in direct doesn’t match what he testified in 2019. Earlier, he simply stated he wasn’t happy with administration’s response to proficiency testing. His testimony on Friday was extra detailed.

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Erin Woo

We’re now into questioning concerning the testimony itself. Wade is asking Rosendorff about his causes for leaving Theranos. Wade asks if Rosendorff mentioned that query/reply with the federal government. Rosendorff says sure.

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Erin Woo

Wade presses him on whether or not he informed the federal government what he was going to testify.

Rosendorff says no.

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Erin Woo

Wade is now asking about how Rosendorff was ready to testify by the federal government. Rosendorff: “I used to be all the time instructed by the federal government to be truthful.” Wade requested: “Did they let you know to offer that reply?” Rosendorff: “No.”

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Erin Woo

Wade goes by way of a listing of individuals and asking Rosendorff if he’s met every of them. His tone is way extra aggressive than with earlier witnesses.

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Erin Woo

We’re beginning with cross-examination. Lance Wade, Holmes’s lawyer, is beginning by grilling Rosendorff on what number of occasions he’s met with the federal government.

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Erin Woo

And, with that, his direct testimony has wrapped. We’ll choose up with cross-examination after a 30-min. break.

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Erin Woo

Ultimately, Rosendorff stated, he left after “endless meetings and conversations, very careful study of medical literature, late nights … great efforts on my part to improve the quality of testing at Theranos.”

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Erin Woo

Rosendorff testified about why he spoke with then-WSJ reporter John Carreyrou: stated he felt a “moral and ethical” obligation to alert the general public.

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Erin Woo

Bostic identified the road “We will execute this year.” When did Theranos begin testing? he requested. Rosendorff responds: 2013.

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Erin Woo

More texts from Holmes/Balwani! Holmes: “This year is our year. We can never forget this tiger.” Balwani: “I know, I am focused on it. We will execute this year.” Holmes: “I know. I’m focused on it too. And for our kids never forget who we are.”

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Erin Woo

On Rosendorff’s final day, he says Balwani supplied a handshake, and he declined. Balwani gave him exit paperwork to signal. Balwani stated he could be ready to maintain him on, however Rosendorff stated it wasn’t well worth the danger to his repute.

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Erin Woo

Holmes forwarded it to Balwani: “We need to respond to him now and cut him Monday.” Rosendorff had already accepted a job supply at one other lab and was planning on leaving — interpreted this as them making an attempt to fireplace him proper earlier than he left.

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Erin Woo

Nov. 2014 e-mail to Rosendorff asking for a redraw. Rosendorff forwarded this to Holmes/Balwani, and Balwani stated the rep “jumped the gun” asking for a redraw. Adam forwarded this to Elizabeth: “I find Sunny’s response offensive and disingenuous. He should apologize.”

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Erin Woo

Gov’t making an attempt to make the purpose that Holmes/Balwani are actively courting investments whilst Rosendorff raises issues about essential issues within the lab.

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Erin Woo

We’re now taking a look at Nov. 2014 texts between Balwani and Holmes, speaking about investments from Alice Walton and Rupert Murdoch. Balwani: “They are not investing in our company, they are investing in our destiny.”

Erin Woo headshot

 

Erin Woo

“…how fundamental it is to all of us for you or any other employee never to do anything you’re not completely confident in.” Rosendorff says he disagrees with this, and we’ve seen emails displaying that he raised issues.

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Erin Woo

Holmes’s response (pt. 1): “How sad and disappointing to see this from you. Outside of the fact you’ve never emailed me on any concerns you allude to there before but now email this, you know from every conversation we’ve ever had together …”

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Erin Woo

Now taking a look at Nov. 14 emails from Rosendorff. “I feel really uncomfortable with what is happening right now in this company. Is there any way you can get Spencer back on the CLIA [Clinical Laboratory Improvement Amendments] license and take me off? I am feeling pressured to vouch for results that I cannot be confident in.”

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Erin Woo

Christian forwarded the e-mail to Elizabeth, writing: “His response to this was to do a vacutainer redraw & I ended the conversation at that point.” A vacutainer draw is a non-Theranos retest.

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Erin Woo

He continued: “Further 100% honesty and transparency to the patient is essential. “My first duty is not to Theranos, but to the patient as per my Hippocratic oath “primum non nocere.” “I never said I wouldn’t talk to the MD.”

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Erin Woo

In an e-mail to Christian, Rosendorff doubled down. “This is not a question of interpreting results — this is a question of the reliability and accuracy of the result.” “The most constructive thing at this point is to offer reliable and robust assays, not to spin.”

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Erin Woo

Nov. e-mail from Rosendorff concerning the affected person name to Christian: “If you’re asking me to defend these values then the answer is no.” He was refusing to defend the accuracy of the consequence, Rosendorff testifies.

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Erin Woo

Emails like this contributed to a “crescendo” of points, Rosendorff testifies, resulting in his resignation in Nov. 2014.

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Erin Woo

Looking at an e-mail from a medical assistant involved that HDL and LDL (ldl cholesterol) readings should not including up. That raises issues concerning the accuracy of the take a look at, Rosendorff testifies.

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Erin Woo

In a follow-up e-mail from Holmes: “Kerry please delineate this based on what we did with the NY inspector recently and send that out.” No one was allowed to enter or exit the Normandy lab in the course of the go to, Rosendorff stated. Those instructions got here from Balwani.

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Erin Woo

1/26/13 e-mail from Holmes concerning the upcoming audit from the California Dept. of Public Health: “Let me know if the path for walking the auditors in and downstairs has been cemented so we avoid areas that cannot be accessed, and what that path is.”

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Erin Woo

Christian forwarded the message to Daniel Young and cc’d Elizabeth. In a later e-mail to Elizabeth and Daniel, Christian wrote that Rosendorff already authorized the redraw. “Need to discuss messaging for my call with this doc, with regard to reason for the redraw,” Christian wrote.

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Erin Woo

Now taking a look at an e-mail to Christian Holmes to approve a redraw, regardless of his not having a place within the medical lab or a medical/science background. Rosendorff says he wasn’t conscious Christian was concerned in approving redraws.

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Erin Woo

Now onto discussing transparency. “I felt a conflict between the messaging that the company wanted me to provide … and my duty as a physician” to precisely report outcomes when speaking with medical doctors, Rosendorff says.

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Erin Woo

In an e-mail chain concerning the proficiency testing samples, Balwani wrote that Theranos’s validation has been “excellent in the past” and that “it is these PT samples that are off.” Rosendorff testifies that he disagrees.

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Erin Woo

There was no formal proficiency testing course of at Theranos, Rosendorff says. He says he raised these issues at a mid-2014 assembly to individuals together with Holmes, Theranos’s president, Ramesh Balwani, and the VP Daniel Young. He felt like they gave “lip service” to this concern, and there was no progress made earlier than he left in November.

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Erin Woo

Rosendorff’s response to conditions like this: “Every time we got a physician complaint, every time our QC would fail, every time we had a spate of anomalous results, it raised great concerns to me about the accuracy of the testing process.”

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Erin Woo

We’re taking a look at an e-mail from somebody who has been on coumadin, a blood thinner medicine, for 13 years. After switching to Theranos testing, her outcomes got here again low, and he or she elevated her dose because of this. “I have not felt ‘right’ since the one increased dose,” she wrote.

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Erin Woo

I’m again within the courtroom for one more day of the Elizabeth Holmes trial! We’re beginning with the tip of former lab director Adam Rosendorff’s direct testimony.

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Erin Woo

With that, we’re going to interrupt for the weekend. I’ll be within the courthouse Tuesday, Wednesday and Friday subsequent week — see you on Tuesday!

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Erin Woo

For the previous hour, Rosendorff has testified about issues w numerous exams, incl. the potassium, chloride and sodium exams. In a ten/27/14 e-mail, he wrote: “I am not sure of the clinical value of a sodium assay, in which the only time we can report it is when it is not critical”

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Erin Woo

We’re now entering into Rosendorff’s determination to go away. He forwarded work emails with problems with concern to his Gmail account in 2014, testifying that “I wanted to protect myself.” He additionally says he began on the lookout for one other job in mid-2013, shortly after becoming a member of Theranos.

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Erin Woo

Today’s theme appears to be a) Rosendorff was involved about defective exams, b) Rosendorff really useful the corporate cease utilizing these exams and c) Holmes/Balwani had been conscious however declined to alter course.

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Erin Woo

We’re now on points with Theranos’s HDL (ldl cholesterol) exams. Rosendorff says he “suspected” Theranos’ HDL was not working as of Feb. 2014 and recommended reverting to FDA-approved units, however acquired pushback from Balwani, Holmes and Theranos VP Daniel Young.

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Erin Woo

We’ve now seen two e-mail chains together with Holmes/Balwani about complaints/points that Rosendorff wasn’t included on. Rosendorff says he “absolutely” ought to have been included on the emails.

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Erin Woo

Rosendorff is testifying about points with the hCG exams, which detect being pregnant. In June 2014, Christian Holmes wrote to Elizabeth: “Just fyi-hCG right now causing some serious issues and patient complaints.”

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Erin Woo

We’re evaluating Rosendorff’s time on the University of Pittsburgh to his time at Theranos. At Theranos, complaints about take a look at outcomes had been “much more frequent,” and he “felt pressured to defend the company’s results to physicians,” he stated.

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Erin Woo

Theranos units failed so often that it raised questions concerning the accuracy of the outcomes, Rosendorff testifies. Performance of Theranos assays was worse than non-Theranos analyzers.

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Erin Woo

Rosendorff is now discussing high quality management. As we realized in Cheung’s testimony, high quality management occurred as soon as a day, and machines could be recalibrated in the event that they failed. This was a frequent dialogue matter at Theranos, he testifies.

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Erin Woo

Rosendorff had a gathering w Holmes the place he expressed his issues. She was very nervous and was not her traditional composed self, he stated: She was trembling, knee was shaking, she was very upset.

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Erin Woo

In an e-mail to Holmes, Rosendorff wrote that “A few more weeks to sort through these medical and logistical issues, and getting the proper level of training and staffing would help us tremendously.”nd staffing would assist us tremendously.”

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Erin Woo

An e-mail from Rose Edmonds from 9 days earlier than the launch says “none of our assays are completely through validation including clinical sample testing with fingerstick.” Under CLIA legislation, the exams should be validated correctly earlier than they can be utilized for affected person care.

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Erin Woo

Leading as much as Sept 2013 business launch, there was “a lot of anxiety” concerning the appropriateness of utilizing modified exams for affected person care. The basic temper of the corporate was “very optimistic,” however some had been questioning why Theranos wasn’t utilizing its personal units.

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Erin Woo

The downstairs Theranos lab, which contained the Theranos Edison units, was known as Normandy, Rosendorff stated. According to Rosendorff, Balwani known as the upstairs lab with standard units Jurassic Park: Balwani “believed the conventional devices were dinosaurs.”

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Erin Woo

Rosendorff beginning sturdy with why he give up Theranos, incl. unwillingness of administration to carry out proficiency testing and feeling pressured to vouch for exams he wasn’t assured in. Also: “The company was more about PR and fundraising than patient care.”

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Erin Woo

The authorities is asking former Theranos lab director Adam Rosendorff at the moment within the trial of Elizabeth Holmes. Per prosecutor John Bostic, this testimony is more likely to take all day.

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Erin Griffith

Mattis is completed and now a prosecutor is studying textual content messages between Holmes and Balwani whereas a forensics man from PWC says “yes” and “correct.” I suppose that is how they need to current this proof however it’s actually actually weird.

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Erin Griffith

On redirect: Why did Mattis initially assist Holmes after the WSJ expose after which change his thoughts? There had been too many surprises, he stated. “We were unable to help her on the fundamental issues that she was grappling with if we only saw them in the rearview mirror.”

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Erin Griffith

We take a look at Mattis’ emailed response to Holmes after the WSJ article. “Be swift in response with unassailable truth,” he wrote. “I have full faith in our plan.”

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Erin Griffith

He additionally asks if Mattis knew Theranos was doing blood exams in a central lab.
Mattis: “I assumed the central Theranos lab was the Theranos machine.”

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Erin Griffith

In cross-exam, Holmes lawyer Kevin Downey requested Gen. Mattis about his {qualifications} to guage Theranos’s know-how and be a board director.

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Erin Griffith

Initially Mattis thought the issue was fixable — the corporate merely tousled its messaging and will come clear. Soon after, he started to query whether or not or not the Edison machine labored. “There just came a point when I didn’t know what to believe about Theranos anymore.”

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Erin Griffith

After WSJ article, board members emailed Holmes concerning the allegations. Her response: Theranos was transitioning from working below one laboratory framework to a different. Mattis: “I was still confused.” At a minimal, “we had a reputation problem here and an integrity problem.”

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Erin Griffith

Ominous. After Theranos realized a few 2015 WSJ article by John Carreyrou that uncovered issues with Theranos’s know-how, there was a board assembly with a slide titled “Duty of Loyalty.” We are proven that slide, besides it’s comically redacted — all content material blacked out — and Mattis doesn’t bear in mind it.

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Erin Griffith

We see an e-mail from Holmes instructing Mattis that, in an interview with Ken Auletta of The New Yorker, he can’t focus on “how our technology works (i.e. that there is a single device that does all tests)”

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Erin Griffith

Fortune revealed a protracted correction to that article, which I don’t bear in mind seeing from plenty of different shops that wrote optimistic tales. Parloff is listed as a witness and protection is making an attempt to compel him to show over his notes.

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Erin Griffith

Assistant U.S. legal professional John Bostic pulls up Fortune’s 2014 cowl story about Theranos. Mattis spoke to the reporter, Roger Parloff, and stated Holmes gave him steering on what he may and couldn’t say.

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Erin Griffith

Still making an attempt to coach my mind to not hear “amino acid” each time they are saying “immunoassay”

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Erin Griffith

Theranos obtained plenty of mileage out of a 2013 WSJ article! We see an e-mail the place Holmes sends Mattis the hyperlink, in addition to a slide of it in a Theranos board presentation

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Erin Griffith

We’re going by way of this board presentation, which has a slide claiming Theranos’s tech had been validated by 10 of the 15 largest pharmaceutical firms, alongside logos of FDA & WHO and a quote from Johns Hopkins.

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Erin Griffith

What had been your sources for details about the corporate? Mattis: “Ms. Holmes.” “Was she the primary source?” “The sole source.”

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Erin Griffith

Mattis additionally invested $85k into Theranos, which he stated was a major sum “for someone who had been in govt. service for 40 years.”

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Erin Griffith

Did you settle for Ms. Holmes’s invitation to hitch Theranos’s board? “Yes I did, after asking why. I was not a medical person.” She stated she wished his mgmt. and organizational expertise.

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Erin Griffith

Mattis testified that he was not conscious of Theranos units ever getting used on battlefields, army helicopters, clandestine operations…

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Erin Griffith

Mattis testified that Holmes was “very aggressive” at wanting the army pilot program to get going. “She was very confident that if we got it in there, it would prove itself.” He knew it was a start-up, however famous that Holmes had been engaged on it for a decade by 2013.

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Erin Griffith

oy, one other e-mail the place Mattis calls Holmes “young Elizabeth.”

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Erin Griffith

Holmes was the one telling him concerning the Theranos gadget’s capabilities, he stated. “I was frankly amazed at what was possible.” But he added: “That didn’t take the place of having the device prove itself.”

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Erin Griffith

Mattis testified the scale of the Theranos gadget and its promised capabilities made it so engaging to potential army use. Accuracy and reliability had been important given the casualties, he stated. “The stakes are very high.”

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Erin Griffith

In one e-mail, Mattis informed Holmes he needs to discover a pilot venture to check Theranos machines alongside the military’s present techniques to check. Mattis testified that he was very “taken” by the probabilities of utilizing a drop of blood for diagnostics.

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Erin Griffith

Mattis, a U.S. basic and former secretary of protection, was on Theranos’s board between 2013 and 2016.

We begin by taking a look at 2011 emails between them after assembly. In one, Mattis writes, “thank you for your note, young Elizabeth, and I wish you every success.”

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Erin Griffith

At the courthouse for US v. Holmes. James Mattis has taken the stand.

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Erin Griffith

Gould’s testimony lasted around 15 minutes – From behind a clear mask, she got emotional discussing her experience finding out via Theranos tests that, after three miscarriages, her fourth pregnancy was not viable. The happy ending is that it was. She had a baby. Adjourned!

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Erin Griffith

Defense wraps up by pointing out that Zachman’s practice had many many test results from Theranos beyond Ms. Gould that seemed to be fine. Judge Davila is eager to keep going, even though we are over on time today. Brittany Gould takes the stand.

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Erin Griffith

Defense works to chip away at the testimony by implying that the Theranos test results simply existed on a different scale and should have been “rebaselined.” Also famous that Holmes’s brother Christian, who responded to Zachman’s grievance concerning the outcomes, apologized.

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Erin Griffith

Oh my, Theranos supplied Zachman a “corrected” model of the outcomes which merely eliminated a decimal level however the she says numbers nonetheless wouldn’t have made sense throughout the context of a viable being pregnant or a lack of one.

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Erin Griffith

“This circumstance was very impactful to me as it stood out as such a red flag for the pregnancy.”

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Erin Griffith

Gould took 5 blood exams, 3 from a subsidiary of Quest Diagnostics and a pair of from Theranos. She went on a rollercoaster, with the Quest take a look at displaying she was pregnant, the 2 Theranos exams displaying a miscarriage, and a pair of extra Quest exams displaying she was certainly nonetheless pregnant.

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Erin Griffith

Zachman describes the case of a affected person named Brittany Gould (sp?) who had had 3 miscarriages. She got here to see Gould after a optimistic at-home being pregnant take a look at “to establish that yes, she is pregnant and look at the health of the pregnancy.”

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Erin Griffith

Zachman was on a committee that evaluated service suppliers and her observe adopted Theranos blood exams round 2014. Theranos even arrange a lab downstairs from one among her observe’s workplaces, which Zachman stated was “very exciting.”

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Erin Griffith

New witness: Audra Zachman, a nurse practitioner at an OB-GYN observe.

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Erin Griffith

I’ve loved chatting with a number of the trial-heads and and followers of justice who’ve proven as much as watch (offered they are not moles :). Today I met a retired paralegal who says he was on the Patty Hearst trial!!

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Erin Griffith

Redirect up. US Attorney Robert Leach reminds jurors that when Gangakhedkar resigned from Theranos, she had issues concerning the reliability of Theranos’s exams and mentioned them with Holmes.

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Erin Griffith

More unhealthy boss/good boss content material: We see an e-mail Gangakhedkar despatched to Balwani defending how laborious her crew was working + an e-mail she despatched to her crew praising their lengthy hours. She then resigned from Theranos and Holmes tried to get her to remain, providing time without work.

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Erin Griffith

Defense beforehand confirmed that Holmes let Gangakhedkar go to India to see household, portray her as a sympathetic boss and Balwani because the aggressive one. “[Balwani’s] trying to make you feel guilty that you weren’t working?” “Yes” “You were frustrated by that?” “Yes.”

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Erin Griffith

We are nonetheless doing cross-examination of Gangakhedkar.

Wade reveals an e-mail from the previous Theranos president, Ramesh Balwani (who goes by Sunny), chastising the lab staff for not working as laborious as his software program crew, portray him because the one pushing unrealistically for overwork.

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Erin Griffith

Zachman will now supply skilled testimony on decoding HCG exams (a hormone used to determine being pregnant standing)

You count on HCG ranges to double each 48 hours or so in early being pregnant.

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Erin Griffith

Wade goes on a run of questions (peppered with “yes” responses by Gangakhedkar) arguing that the purpose of R&D is encountering points and setbacks and fixing them.

“In R&D sometimes you have to fail before you can succeed right?”
“Yes.”

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Erin Griffith

We see an e-mail the place Holmes requested Gangakhedkar for some testing information forward of a gathering with the DoD. Gangakhedkar emails that Vitamin D information is not prepared and Holmes writes asking for information on different exams. The level is, apparently, take a look at this instance of Holmes not doing fraud.

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Erin Griffith

The Defense technique re: Theranos lab issues appears to be: look, actual work was being performed; there have been processes in place that certain appeared rigorous; the very individuals mentioning issues additionally signed off on all of it.

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Erin Griffith

So far it’s principally a name and response, the place Wade describes work of Gangakhedkar + Theranos’s lab, and Gangakhedkar replies “yes.” “Were you proud of that work?” “Yes.” “And others at the company were happy about that work as well?” “I think so.”

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Erin Griffith

Back within the San Jose courtroom at the moment for extra US v Holmes. Surekha Gangakhedkar, a scientist at Theranos, is again on the stand being cross-examined by Holmes’s lawyer Lance Wade.

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Erin Woo

With that, Judge Davila is ending Gangakhedkar’s testimony for the day and instructing jurors to not eat media content material concerning the trial, as all the time. The trial will resume on Tuesday — Erin Griffith will likely be on the courthouse to convey you reside updates.

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Erin Woo

We at the moment are onto cross-examination. Holmes’s lawyer is questioning her about G.S.Ok.’s examine of Theranos’s assays, mentioning that the examine promoted her work. “The Theranos system eliminates the need for a lab and provided quality data,” the G.S.Ok. memo stated.

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Erin Woo

Despite having signed an N.D.A., Gangakhedkar printed out some paperwork and took them dwelling when she left Theranos. “I was worried that I would be blamed,” she testified.

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Erin Woo

Three days after the e-mail from Balwani, Gangakhedkar despatched Holmes her resignation e-mail. She testified that she was “very stressed and unhappy and concerned” with the planning of the Walgreens launch.

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Erin Woo

In an e-mail from Balwani to Gangakhedkar, with Holmes copied, Balwani stated the software program crew had been working till 3:07 a.m., however that the Edison blood-testing units Gangakhedkar’s crew labored on had been “all sitting idle.” This was an instance of the strain they had been below, Gangakhedkar stated.

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Erin Woo

And, with that, Cheung has been dismissed. The authorities is asking Surekha Gangakhedkar now, a former Theranos crew supervisor.

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Erin Woo

The authorities is now asking questions on a doc that claims, amongst different issues, that Theranos’s units “can be operated with minimal training” and that its outcomes have “precision and accuracy equivalent to traditional clinical laboratory analyzers.” Neither is true, Cheung says.

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Erin Woo

Cheung stated they had been continually having to recalibrate the machines, which made outcomes take 2-3 days moderately than the couple hours promised. “We had people sleeping in the car because it was taking too long,” she stated.

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Erin Woo

Cheung simply stated she “became concerned about a month in” with the vitamin D samples, in November of 2013. She was involved concerning the efficiency of the exams and that they had been getting used on affected person samples.

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Erin Woo

Defense is completed with cross-examination, after displaying Cheung Theranos coverage paperwork she stated she’d by no means seen. The authorities is now asking questions once more for redirect.

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Erin Woo

Holmes’s lawyer is asking Cheung plenty of questions on high quality management checks that occurred on the Theranos units. “There is a recognition that some errors would happen and this was the policy on how to deal with those errors,” he stated.

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Erin Woo

Erika Cheung is now taking the stand as cross-examination continues.

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Erin Woo

The replace you have all been ready for: The choose is STILL announcing it ther-AH-nos.

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Erin Woo

In the courthouse now for one more day of the Elizabeth Holmes trial. We’re anticipating to wrap up testimony at the moment from Erika Cheung, one of many key whistleblowers within the case.

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Erin Griffith

That’s it for at the moment.🩸💉⚖️

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Erin Griffith

So far the theme of the cross-exam of Cheung appears to be utilizing excruciatingly arcane particulars concerning the processes and procedures of the Theranos lab to point out that its work was very difficult, involving numerous good, pedigreed individuals.

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Erin Griffith

Cheung testified that in conferences about high quality management failures, Theranos’s lab administrators ignored the obvious potential cause for the failures: “The Edison devices didn’t work.”

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Erin Griffith

Trial gear alert: A reporter introduced their very own binoculars to see the displays on the TV screens.

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Erin Griffith

Erika Cheung is again on the stand.

She described Theranos’s observe of demoing blood exams for V.I.P.s, the place a number of the outcomes got here from Theranos machines and others from Siemens analyzers.

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Erin Griffith

At this level we now have heard attorneys and witnesses pronounce “Theranos” a whole lot of occasions, making me begin to wonder if choose is making an attempt to mess with us by sticking to his “ther-AHHHHH-nos” pronunciation.

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Erin Griffith

I ought to notice the lady who clapped and yelled “you’re a good mom!” at Holmes yesterday immediately stormed out of the courtroom after Judge Davila warned everybody that yelling stuff like that in entrance of any jurors may trigger a mistrial. I don’t see her right here at the moment!

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Erin Griffith

Elizabeth Holmes’s entourage is down to only her mother at the moment.

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