By Jody Godoy
SAN JOSE, Calif. (Reuters) -Theranos founder Elizabeth Holmes on Tuesday confronted prosecutors’ questions about her romance with former passionate and small business partner Ramesh “Sunny” Balwani, a working day after Holmes mentioned that he had been abusive and managing.
Holmes, 37, testified on Monday that the 10 years-lengthy romance experienced a pervasive impact on her daily life through the time when prosecutors say she fully commited fraud.
During Holmes’ emotional testimony, jurors observed a diverse side of the startup founder from the self-confident business executive that prosecutors say defrauded buyers and sufferers. On Monday she reported she poured herself into the blood-testing corporation she launched at age 19 just after being raped at college. Then when she remaining for Theranos, Balwani had been sexually and verbally abusive and advised her she would not realize success without the need of adhering to his tips, she reported.
On Tuesday, just before questioning Holmes on statements to buyers that go to the core of the allegations towards her, prosecutor Robert Leach examined the connection with Balwani, who has denied abuse.
Leach had Holmes go through aloud texts among her and Balwani that he reported confirmed them expressing adore for every other.
“I prayed from the bottom of my coronary heart for you,” Balwani wrote in just one trade in 2015, which Holmes read through, showing to brush away a tear.
Prosecutors say Holmes lied about the effectiveness of the technological innovation at the now-defunct startup, declaring it could run diagnostic assessments much more speedily and correctly than traditional lab testing.
The previous Silicon Valley executive has pleaded not responsible to nine counts of wire fraud and two counts of conspiracy.
Holmes testified very last 7 days that Balwani was in cost of specified facets of the company, such as economic projections that have been shared with investors.
She explained on Monday that she did not dilemma him as she should have, since he had taught her “anything I thought I realized about company.”
Prosecutor Leach on Tuesday also walked Holmes as a result of textual content exchanges where by Balwani, who was Theranos’ chief functioning officer, expressed thoughts about issues at the firm. Holmes agreed that Balwani experienced not concealed his views from her.
In court docket filings, Balwani, 56, has “categorically” denied abuse allegations, contacting them “wrong and inflammatory.” An legal professional for Balwani did not reply to a ask for for comment on Monday.
Balwani, who is also charged with fraud and will stand trial separately, has pleaded not responsible.
After valued at $9 billion, Theranos vaulted Holmes to Silicon Valley stardom. The enterprise collapsed just after the Wall Street Journal revealed a collection of articles or blog posts commencing in 2015 that suggested its products were being flawed and inaccurate. She was indicted in 2018.
Holmes admitted on Tuesday less than cross-evaluation that she had been suggested by lawyers that superlative descriptions of the Theranos’ know-how, this kind of as that its strategies resulted in the “maximum ranges of accuracy,” really should be toned down to stay away from authorized troubles. But, Leach pointed out, months later on, these identical phrases were even now applied in trader displays.
Leach also questioned Holmes about steps Theranos experienced taken in reaction to then-Wall Avenue Journal reporter John Carreyrou’s news stories about Theranos’ know-how. Holmes reported that the firm’s reaction to his reporting was a “disaster” and admitted attempting to quash it.
Carreyrou, who was in the courtroom on Tuesday, authored “Lousy Blood,” which chronicles the rise of the business that Holmes commenced at age 19 and describes retaliation against previous staff just after they raised worries about Theranos products.
Holmes on Tuesday denied trying to retaliate from two of all those personnel. But she admitted that problems expressed by previous Theranos lab staff Erika Cheung, who was a witness for the prosecution, ended up later validated by a regulator’s report on Theranos’ functions.
“I absolutely sure as hell would like we experienced treated her in another way and listened to her,” she said of Cheung.
Holmes’ cross evaluation is scheduled to resume on Dec. 7.
(Reporting by Jody Godoy in San Jose, Calif Editing by Noeleen Walder, Grant McCool, Peter Cooney and Sandra Maler)