Government prosecutors in the trial of Theranos CEO Elizabeth Holmes ended their case on Friday, capping off 11 weeks of testimony from witnesses detailing allegations of fraud against the founder.
The Theranos saga has been widely covered since cracks began to emerge in the glossy image of the blood testing startup in 2015. But the first phase of the trial revealed more startling new details.
Investors, former employees and customers chipped away at the successful startup image that Theranos presented during its meteoric rise, instead painting a picture of a chaotic workplace with a founder desperate to succeed – tolerating little dissent amid rising questions about the company’s technologies.
Holmes has pleaded not guilty to the charges of defrauding investors and patients .On Friday, Holmes took the stand in her own defense, a risky move that opens her to being grilled in cross examination by the prosecution.
Here is what we have learned so far.
Former employees: Concerns fell on deaf ears
Theranos launched in 2003 and claimed that its proprietary Edison machines could perform hundreds of health tests with just one prick of blood. The company gained momentum, forging partnerships with big names such as Safeway and Walgreens to distribute its tests, raising billions in funding. Amid this spectacular rise, four different lab directors at the company said they had voiced grave concerns about its technological abilities operations.
Over six days of questioning, former lab director Adam Rosendorff said he repeatedly expressed doubts about Theranos’ tech to Holmes, but faced “tremendous pressure at the company to show that this technology was successful”.
“I had frequent conversations with Elizabeth about concerns that I had in the laboratory,” he testified. Frustrated and disillusioned, he left the company in 2014, he said, noting that when he left he felt “very skeptical” of the Edison machine.
Lynette Sawyer and Sunil Dhawan, co-directors of the lab in 2014 and 2015, testified to a disjointed lab operation, noting they never met one another in person and rarely visited the lab or met researchers. They alleged their roles consisted primarily filling out paperwork.
“I was very uncomfortable with the lack of clarity about the lab,” Sawyer testified.
A fourth former lab director, Kingshuk Das, testified that the Edison devices were returning unusual lab results – turning up prostate-specific antigens for female patients, for example. “I found these instruments to be unsuitable for clinical use,” Das said of the devices.
When Das questioned Holmes about the inconsistencies, Das said, the founder became defensive and offered “implausible” explanations as to why the machines were malfunctioning.
Investors: Theranos over-promised without showing results
Theranos attracted large amounts of funding in part due to high-profile investors, including former secretary of states George Schultz and Henry Kissinger, media tycoon Rupert Murdoch and former defense secretary James Mattis. Several of those investors told the jury about their initial excitement about the company and their growing reservations as red flags piled up.
Testifying early in the trial, Mattis said he personally invested $85,000 in Theranos, finding the technology “pretty breathtaking”. He was asked to serve on the company’s board, a request he said he questioned as he was “not a medical person” but agreed to (He was paid $150,000 to serve on the board).
Mattis said he ultimately lost faith in the company after the Wall Street Journal revealed Theranos’ testing devices were not actually being used to perform most of the analyses the company offered. “There came a point where I didn’t know what to believe about Theranos any more,” he said.
Former estate attorney and Theranos investor, Daniel Mosley, testified how he became enamored with the company’s mission and convinced a number of wealthy clients and contacts to invest in it. His recruits included Walmart’s Walton family and Michigan’s billionaire DeVos family. Along with his own investment of $6m, Mosley brought an estimated $380m to Theranos.
Several other financial backers of Theranos told the jury they were troubled by the extensive secrecy around the company’s operations, which made it difficult to properly vet whether it was a smart investment. Meanwhile, they reported a pressure to get in on a much-hyped opportunity before it was too late. Lisa Peterson, who handles investments for the DeVos family, said she feared Holmes would ice her out if she asked too many questions about the company.
“We were very careful not to circumvent things and upset Elizabeth,” she said. “If we did too much, we wouldn’t be invited back to invest.”
Drug companies and other business partners: We were manipulated
Among the most shocking allegations in the trial so far was the prosecution’s accusations that Theranos used false and misleading documents implying that external labs had vetted the products – when in reality they had not – to promote its Edison tests to potential partners.
Walgreens CFO Wade Miquelon revealed during his testimony that Holmes had implied drug firms Pfizer and Schering-Plough had validated the company’s blood-testing technology.
Holmes, Miquelon said, shared with investors and potential partners a document carrying the Pfizer logo, purportedly showing the pharmaceutical company’s support. But the document had been forged, the prosecution claims.
“Pfizer did not write this,” prosecutor Robert Leach said in opening arguments for the trial. “Pfizer did not put its logo on this. Pfizer did not give its permission to put its logo on this. Pfizer did not make the conclusions in this report.”
Trusting such reports, Miquelon said, Walgreens made a $140m deal with Theranos in 2013 and launched testing in 40 stores across Arizona and California. That partnership fell apart over the next year and Walgreens ultimately sued Theranos in 2016, settling for $25m.
Meanwhile, scientists at the pharmaceutical companies Holmes claimed had endorsed Theranos, told the jury they had repeatedly expressed doubts. Former Schering-Plough director Constance Cullen said when vetting Theranos technology in 2009, she found Holmes to be “cagey” and indirect in answering technical questions. She was left “dissatisfied” and ceased responding to emails from Holmes.
Similarly Shane Weber, a former Pfizer scientist, said he was left feeling unsettled by an interview with Holmes in 2008 to assess a potential partnership. “[Theranos] provided non-informative, tangential, deflective or evasive answers”, Weber wrote in a report referenced during the trial, testifying that he recommended Pfizer halt potential partnerships with the company.
Holmes stayed silent in the court room during prosecutors’ presentation of the case, writing notes by hand in a notebook, flanked occasionally by supporters including husband, Billy Evans, and her mother.
She took the stand on Friday, laying out the trajectory of the startup, and testifying that she believed Theranos had developed technology capable of running any blood test.
“We worked for years with teams of scientists and engineers to miniaturize all the technologies in the laboratory,” she said, testifying for about five hours before the court closed for the day.
Holmes’s decision to testify is a risky one, since it means she’ll face cross examination from the prosecution.Holmes’s legal team is expected to argue in the coming weeks that Holmes made decisions in good faith and did not purposely deceive investors and customers.
“Theranos failed for a lot of reasons, but it failed in part because it made mistakes,” Lance Wade, a defense lawyer for Holmes, said during opening statements. “Ms Holmes made mistakes, but mistakes are not crimes. A failed business does not make a CEO a criminal.”
Early court filings indicated the defense may also use an argument that Sunny Balwani, Holmes’s former boyfriend and Theranos co-executive, abused and controlled her, influencing her to commit fraud. Balwani faces his own trial on charges similar to Holmes’s in 2022.
Holmes faces a maximum of 20 years in prison. Jurors could come to a verdict before the year’s end.
Legal teams for Elizabeth Holmes and Sunny Balwani did not respond to the Guardian’s request for comment.
VMware has restored availability of vSphere 7 Update, a release that it withdrew in late 2021 after driver dramas derailed deployments.
Paul Turner, Virtzilla’s veep for vSphere product management, told The Register that the source of the problem was Intel driver updates that arrived out of sync with VMware’s pre-release testing program. When users adopted the new drivers – one of which had been renamed – vSphere produced errors that meant virtual server fleet managers could not sustain high availability operations.
Turner said around 30,000 customers had adopted the release, of which around eight per cent encountered the issue. That collection of around 2,400 impacted users was enough for VMware to pull the release before the other 270,000 vSphere users hit trouble. That level of potential problems, Turner admitted, was considered a sufficient threshold to justify a do-over and the embarrassment of a pulled release.
VMware has since reviewed its testing program and procedures in the hope it will avoid a repeat of this error. Doing so, and repairing the release, meant a busier-than-usual holiday period for VMware developers. Turner said those who put in the extra hours will be compensated with extra time off in the future.
VMware also used the time needed to get the release ready to ensure that vSphere 7 U3 thoroughly addresses the Log4j bug. It took the opportunity to update to the latest version of the tool – which is free of the critical bug that allowed almost any code to execute without authorisation.
But VMware decided not to add anything new to vSphere while it addressed Log4j and sorted out the driver drama. Users will have to wait a few more months for another dose of VMware’s usual concoction of security updates and feature tweaks.
There’s more interesting stuff on the way, too. VMware has promised a full vSphere-as-a-Service offering is in the works, and the Project Capitola software-defined memory tech that will pool RAM across hosts. The company has also dropped hints that its plan to run its ESX hypervisor on SmartNICs is nearing release.
VMware has detailed the new/old release here and made downloads available here.®
The EU’s antitrust chief Margrethe Vestager said she was satisfied for the company now known as Meta to pursue its Kustomer acquisition after it struck a deal for rivals.
Meta, the company formerly known as Facebook, has secured antitrust approval from the EU to pursue its acquisition of US customer services software start-up Kustomer.
The social media giant’s decision to acquire the start-up attracted EU scrutiny last April, months before its rebrand. Then known as Facebook, the company planned to integrate Kustomer’s products, including a chatbot, into its service.
Now, Meta has assured the European Commission that it will provide rivals free access to its messaging channels for 10 years.
The EU was satisfied that this addressed competition concerns which previously arose from the company’s decision to acquire Kustomer.
“Our decision today will ensure that innovative rivals and new entrants in the customer relationship management software market can effectively compete,” EU antitrust chief Margrethe Vestager said in a statement.
Facebook had initially announced its acquisition plan in November 2020. In February 2021, the Irish Council for Civil Liberties wrote to the European Commission outlining its concerns over data that Kustomer had gathered and what might happen to that data under Facebook’s watch. The Commission also received a referral request from Austria flagging concerns over the Kustomer deal.
Other Meta acquisitions have also attracted the scrutiny of competition regulators. Last November, the UK ordered Meta to sell Giphy after its acquisition of the GIF making company was found to have breached competition rules. In the US, it is facing an antitrust suit that could force the company to sell WhatsApp and Instagram.
The EU’s decision to allow Meta to pursue the acquisition of Kustomer comes following a recent vote in the European Parliament in favour of the Digital Services Act, a companion of the Digital Markets Act. The act represents the EU’s attempt to shift the balance of power away from Big Tech in favour of ordinary people.
The long-debated act was hailed by Facebook whistleblower Frances Haugen as a “gold standard”.
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‘OK, Dad, this is an incredible essay on the effects of grief and grey morality in a postapocalyptic society,” says the eldest child, AKA the millennial. “It’s got proper female characters, progressive takes on sexuality and tonnes of rain.”
“They’ve made a video game of The Handmaid’s Tale?”
“No, Dad. It’s The Last of Us. Don’t worry. It’s still a zombie shooter. And both games have the best ending ever.”
Now she has my interest. Video game endings fascinate me, because my generation started out with arcade games that didn’t have them. Pac-Man kept eating dots and chasing ghosts and the Space Invaders kept coming, wave after incessant wave. The first arcade game that had an actual ending was Dragon’s Lair and nobody actually saw that because it was so hard to complete.
I have a tough start with The Last of Us because I hate games where you search for stuff in every room of a house. I spend my normal life doing that with car keys and headphones. I want games where you walk into a room and all the objects get sucked into a magic pocket. But that isn’t realistic, I hear you cry. Well, neither is only being able to carry three shivs in a world where, despite the zombie apocalypse, cargo pants clearly still exist.
I also hate any form of crafting, because that was what my generation had to do for “fun” as kids before we had video games. Whether it’s smoke bombs from sugar and explosives or a set of Action Man drawers from matchboxes, it’s all boring to me.
“Keep going,” I tell myself. “The millennial says it’s got the best ending ever.”
Throughout the first chapter of Joel and Ellie’s jaunt across a post-infected US I keep trying to guess what this great ending will be. Maybe Ellie isn’t immune to infection after all? Maybe Joel is her real father? Maybe they’re both unwitting participants in some reality TV show, I’m Infected Get Me Out of Here?
As you will all know by now – and if you’ve yet to play The Last of Us then please stop reading – the ending has Joel murder a perfectly innocent and well-intentioned doctor who wants to cut Ellie open to find a cure that will save humanity. But Joel has no truck with utilitarian philosophy, because Ellie has now become a replacement for the daughter he lost. So, he disregards mankind’s future and, by stopping the operation, effectively murders the entire human race (alongside a whole hospital’s worth of doctors).
“Why does he do that?” I asked the millennial, in one of many fantastic discussions we had about the game.
“Because he’s a white male,” came the answer, because it’s 2022 and she’s in her 20s. And maybe she’s right. Either way it is a jaw-dropping, supremely brave ending and the terrific Left Behind side-story also brought the feels.
So, when it came to The Last of Us Part 2, I was beyond excited. Fifty million hours later I was beyond disappointed.
Don’t get me wrong, the millennial nailed it when she said it was a great exploration of the effects of grief and grey morality. But after spending the whole game switching between two strong female characters (literally, have you seen Abby’s arms?) and contrasting factional creeds, you have the final confrontation. They fight. And … they both live. And go their separate ways. The only real damage is Ellie losing a couple of fingers, and the game portrays the worst consequence of this as not being able to play guitar any more. Seriously? That’s the biggest drawback to being fingerless in a zombie apocalypse? The first game ended with Joel murdering an entire civilisation, the second ends with Ellie murdering one song on a guitar. It’s a scene you might have found in The Secret of Monkey Island. It’s hilarious.
The Last of Us Part 2leaves us with exactly the same non-ending as those original arcade games. Ellie and Abby will go on killing to keep their respective postapocalyptic factions going, both driven by the grief of murdered loved ones. They are both trapped, endlessly chasing ghosts. Sounds familiar…
The millennial says this shows there are no winners when it comes to revenge. I say they want both protagonists alive for The Last of Us 3. It’s a cynical cop out. But then, The Last of Us Part 2 is a game that features the most cynical scene ever, where apropos of nothing, after genuinely bravura portrayals of women, transgender and gay characters, alpha female Abby suddenly gets rogered from behind by some guy. It happens out of nowhere. The game spends umpteen hours portraying progressive sexuality, and then it’s like some marketing man decided they needed to toss the incels a piece of red meat to stop them hate-bombing all over 4chan (which didn’t work). It is easily the most gratuitous bit of nudity I have ever seen in games, and I have played The Witcher 3. The rogerer in question even has a girlfriend. Who is pregnant. Way to shit on a sister, Abby.
“It’s basically Pac-Man with gratuitous boobs,” I say to my eldest, who sighs and pours herself a large cup of coffee. This will be another long discussion.