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Former Theranos CEO Elizabeth Holmes to be sentenced

Former Theranos CEO Elizabeth Holmes Awaits Sentencing Friday After 10 Months the jury found him guilty of defrauding investors in a failed blood testing company.

The sentencing hearing in San Jose, California, began shortly after 10 a.m. Pacific Time and deliberations continued until 1 p.m.—normally an unusually long time for a procedural hearing.

Judge Edward Davila of the Northern District of California ruled that the amount to be paid by Holmes would be determined at a later date. Prosecutors had claimed that Holmes owed $804 million for defrauding investors, but Davila ruled that actual damages were likely closer to $121 million.

Holmes, 38, founded Theranos in 2003, and it quickly became one of the best-known startups in the world, with a peak valuation of $10 billion. But a series of revelations by the Wall Street Journal raised questions about the effectiveness of the company’s technology and business practices, triggering a number of investigations by federal and state authorities.

The sentence will be seen as an indication of how seriously punishment can be expected for wrongdoers in the high-flying world of tech startups who misrepresent a company’s capabilities.

Carrie Cohen, global co-president of investigations and white-collar defense, said, “Especially in a highly publicized case, you want the public to know that if you defrauded investors or anyone else, you could be looking at serious jail time.” Have been.” Practice Group at the law firm Morrison Foster.

Cohen said, “Given the facts that all came out at trial, I would suspect that she is looking at a significant amount of prison time, probably close to what the government has asked for.”

In January, Holmes was indicted on four counts Investor Fraud and Conspiracy, A jury acquitted her of four other charges of harming patients who used Theranos’ blood-testing equipment, and could not agree on other charges. Investors in Theranos, a group that included media magnate Rupert Murdoch and software billionaire Larry Ellison, lost $144 million as the startup faltered.

Federal prosecutors are asking for a 15-year sentence and $800 million in fines, characterizing Holmes’ crimes as “one of the biggest white-collar crimes ever seen in Silicon Valley or any other district,” this week according to court filings.

Theranos founder Elizabeth Holmes attends court hearing
Elizabeth Holmes, founder of Theranos, right, leaves federal court in San Jose, Calif., Thursday, Sept. 1, 2022.

Bloomberg


Holmes’ attorneys have requested that she receive no jail time, arguing that she poses no danger to society, has debts she cannot pay and has already been subjected to the “inhumane acts” of Theranos’ collapse. has suffered from brutal” media coverage. He presented testimonials from 130 people, including friends, family and even Sen. Cory Booker, attesting to Holmes’ good care.

Holmes has a 1-year-old son and appeared to be pregnant in a recent court hearing. Cohen said both are factors that could lead a judge to be lenient in sentencing.

Holmes has testified that she was psychologically traumatized after being raped in college, and suffered sexual and emotional abuse at the hands of Sunny Balwani, the former chief operating officer of Theranos, who is 19 years her senior. While the two were running Theranos, Holmes said that Balwani controlled her schedule, diet, and presentation to others, and often put her down and criticized her.

Balwani’s lawyers have denied the claims. found guilty of 12 cases of cheating in July and is to be sentenced on 7 December.

Holmes has said she plans to appeal against her sentence. If she is sentenced to prison, a point of contention could be when she begins the sentence. The judge could delay the start of her term until after Holmes was born. Cohen said she may also post bail to stay out of jail while she appeals her sentence.

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