SAN JOSE, Calif. - As a federal judge in San Jose prepared to swear in a panel of jurors in the criminal fraud case against former Theranos CEO Elizabeth Holmes Thursday, court watchers are waiting to see what impacts the looming trial has on Silicon Valley culture.
U.S. District Court Judge Edward Davila had winnowed down the prospective panel to 41 potential jurors and promised to swear in 12 members along with five alternates by the end of the day.
That will pave the way for opening statements next Wednesday when the government will present its case against Holmes. She’s pleaded not guilty to 10 counts of wire fraud and two counts of conspiracy to commit wire fraud.
The case exposes what many in Silicon Valley’s startup world have describe as a "fake-it-till-you-make it" culture, where companies hustle millions in investment capital before their idea may be fully realized.
"It’s kind of faking your own confidence if you will," said Anna Han, a law professor at Santa Clara University who specializes in tech issues.
But Han drew a sharp distinction between a company that has high – sometimes unrealistic -- aspirations for growth and Theranos, which took the step of bringing its unproven product to market and tested patients’ blood with its partnership with Walgreens.
"There’s a kind of faking in this case where the lab tests were fake," Han said. "The lab tests did not provide the kind of results that the patients were looking for, and that a very different kind of fake in my view."
As Holmes arrived in court Wednesday, she was dressed conservatively, and said nothing -- a far cry from the once turtleneck-clad face of the now dissolved biotech company.
That earlier persona had dropped out of Stanford at age 19 before growing her company to a $9 billion dollar valuation, promising to revolutionize the blood testing industry
But it turns out Holmes was never able to deliver on what she’d spent years selling to investors and patients alike. Her Edison machine that was supposed to provide complex test results with only a few drops of blood never worked as planned.
The feds indicted Holmes and her partner "Sunny" Balwani in 2018.
Now, as Holmes heads to trial, her former public persona will certainly have an effect on her defense. Newly unsealed court records indicate she plans to shift blame to Balwani, her former boyfriend and president of Theranos, claiming she was being controlled and abused by him.
Balwani has denied the accusation in his own court filings. He's set to be tried separately early next year.
That may be a challenge, experts say. Before the company’s tech was exposed as a sham, Holmes had spent years wrangling hundreds of millions from investors, while promoting herself as the company’s most valuable commodity
"She has to convince them that she’s genuinely enthused and involved and excited and that to me is very hard to convey if you are really under the control of someone," Han said of Holmes’ effort to court investors, some of whom put more than $100 million into the company.
Holmes’ attorneys have signaled she may take the witness stand to explain her side. If so, the entire case may come down to her credibly.
"You would ask the question, well now on the stand, is she just trying to convince me to let her off?" Han said.
Evan Sernoffsky is an investigative reporter for KTVU. Email Evan at email@example.com and follow him on Twitter @EvanSernoffsky