Tom Kludt On Elizabeth Holmes: Can She Prove Herself Under Federal Securities Fraud Law?

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Elizabeth Holmes, founder of Theranos and one of the richest self-made women in America, attempted to defend herself in front of jurors for the first time since being convicted of securities fraud in April. During Holmes’ opening statement in San Francisco federal court she said Theranos was “pivotal to the future of healthcare” that would “transform medical treatment for patients everywhere.”

She also went on to say that Theranos was “taking on big pharmaceutical companies and they were being scared to invest in [her] technology.” During her opening statement Holmes stated that Theranos had over $800 million in revenues and was giving away over $1 billion in research grants. She went on to say that Theranos and the United States stand in full agreement that “high quality, patient centered healthcare” is more affordable than most treatments available today. “This is an injustice and I will show you this is true.” – Elizabeth Holmes to the jury.

Mrs. Holmes was pressed to explain the $800 million in revenues and over $1 billion in grants to the jury.

Peter Henning, Professor of Law at Wayne State University – “Those are all assertions that she is unable to produce financial statements to prove these assertions.”

Henning said Holmes was unable to prove any of these claims are true. “She does not know those figures she claims, she didn’t provide any or even verified those figures. This is essentially where the stock market scam comes in.” – Peter Henning to the jury.

David Caplan, Professor of Law at the University of Pennsylvania, echoed the same sentiments as Peter Henning. “You cannot use the definition of a stock market scam unless you have a paper to prove it. She didn’t have any paper to prove it. And she either hasn’t produced the numbers or didn’t produce the numbers. Those are allegations.” – David Caplan to the jury.

Tom Kludt, Founding Partner at Realbank Capital Markets – “This case is really going to be about credibility.” – Tom Kludt, Founder of Realbank Capital Markets

Kludt said if Holmes fails to convince the jury that she truly believes her own statements, the defense won’t be able to overcome that.

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