Alan Eisenman — Cross/Redirect/Recross (Continued)
1,643 linesJUDGE DAVILA: ALL RIGHT. GOOD MORNING. WE'RE ON THE RECORD IN THE HOLMES MATTER. OUR JURY IS PRESENT AND COUNSEL ARE PRESENT AND MS. HOLMES IS PRESENT. GOOD MORNING, LADIES AND GENTLEMEN. I HOPE YOU ALL HAD A GOOD LONG WEEKEND. JUST TO REMIND YOU, WE'RE ONLY GOING HALF DAY TODAY. I HOPE WE CAN GO UNTIL 1:00 O'CLOCK TODAY, AND THE REST OF THE WEEK WILL BE FULL DAYS AS NECESSARY. WE MIGHT HAVE A LATE START ON ONE OF THE DAYS. BUT BEFORE WE BEGIN OUR EVIDENCE, LET ME ASK THE JURY THE QUESTION AGAIN WHETHER OR NOT DURING THE BREAK ANY OF YOU HAD OCCASION TO COME ACROSS, READ, DISCUSS ANY INFORMATION THAT HAD ANYTHING TO DO WITH THIS CASE. IF SO, PLEASE RAISE YOUR HAND. IF YOU WOULD LIKE TO SPEAK PRIVATELY ABOUT THAT, WE CAN DO THAT. I SEE NO HANDS. THANK AGAIN FOR YOUR CONTINUED VIGILANCE AND ADHERENCE TO THE COURT'S ADMONITION. WE HAVE A WITNESS, I THINK, MR. EISENMAN. LET'S BRING HIM IN. MR. DOWNEY, YOU WOULD LIKE TO CONTINUE WITH YOUR EXAMINATION?
MR. DOWNEY: YES, SIR.
JUDGE DAVILA: GOOD MORNING, SIR.
ALAN EISENMAN: GOOD MORNING.
JUDGE DAVILA: IF YOU COULD JUST RESUME YOUR SEAT AGAIN.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: AGAIN, MAKE YOURSELF COMFORTABLE AND ADJUST THE CHAIR AND MICROPHONE AS YOU NEED.
ALAN EISENMAN: THANK YOU.
JUDGE DAVILA: YOU'RE WELCOME. YOU CAN REFRESH YOURSELF WITH WATER THERE. THERE'S FRESH WATER IF YOU WOULD LIKE TO.
ALAN EISENMAN: THANK YOU.
JUDGE DAVILA: WHEN YOU ARE COMFORTABLE, WOULD YOU STATE YOUR NAME AGAIN, PLEASE.
ALAN EISENMAN: YES, SIR. MY NAME IS ALAN EISENMAN.
JUDGE DAVILA: THANK YOU, SIR. I'LL REMIND YOU, SIR, YOU'RE STILL UNDER OATH.
ALAN EISENMAN: OKAY.
(GOVERNMENT'S WITNESS, ALAN EISENMAN, WAS PREVIOUSLY SWORN.)
JUDGE DAVILA: MR. DOWNEY.
CROSS-EXAMINATION BY MR. DOWNEY:
MR. DOWNEY: GOOD MORNING, MR. EISENMAN.
ALAN EISENMAN: GOOD MORNING.
MR. DOWNEY: I WANT TO RESUME TODAY BY TALKING ABOUT THE EVENTS IN 2010 THAT YOU TALKED ABOUT WITH MR. BOSTIC ON YOUR DIRECT EXAMINATION. DO YOU RECALL THAT?
ALAN EISENMAN: YOU'LL HAVE TO REFRESH MY MEMORY.
MR. DOWNEY: OKAY. LET ME ASK YOU TO PULL UP, IN THE BLACK NOTEBOOK THAT YOU HAVE, EXHIBIT 14103.
ALAN EISENMAN: 14103?
MR. DOWNEY: YES, SIR.
ALAN EISENMAN: OKAY.
MR. DOWNEY: DO YOU SEE, FROM THE ADDRESS AT THE TOP OF THESE EMAILS, THAT THIS IS AN EMAIL EXCHANGE BETWEEN YOU AND MS. HOLMES IN MAY OF 2010 DISCUSSING YOUR THERANOS INVESTMENT?
ALAN EISENMAN: IT SAYS MAY 11TH. IS THAT THE ONE YOU'RE TALKING ABOUT?
MR. DOWNEY: YES, SIR. MAY 11TH, 2010?
ALAN EISENMAN: YES.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 14103.
MR. BOSTIC: NO OBJECTION, YOUR HONOR.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 14103 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: DO YOU RECALL THAT IN MARCH OF 2010 THAT YOU HAD ONE OF YOUR QUARTERLY MEETING CALLS WITH MS. HOLMES?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT THE SECOND PARAGRAPH OF THE TOP EMAIL ON -- IT'S AT THE BOTTOM OF PAGE 1. IF WE CAN BRING THAT UP.
ALAN EISENMAN: I SEE IT NOW.
MR. DOWNEY: OKAY. AND DO YOU RECALL THAT IN THE FIRST HALF OF 2010 MS. HOLMES TOLD YOU THAT TWO VERY IMPORTANT EVENTS WERE HAPPENING AT THERANOS IN 2010?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: WELL, DO YOU RECALL THAT SHE TOLD YOU THAT THERANOS WAS IN NEGOTIATIONS WITH RETAILERS ABOUT POTENTIAL AGREEMENTS --
JUROR: YOUR HONOR, OUR SCREENS ARE NOT ON.
JUDGE DAVILA: YOU HAVE A MONITOR ISSUE?
JUROR: I'M SORRY.
JUDGE DAVILA: ARE THE MONITORS FUNCTIONING IN THE JURY BOX?
JUROR: JUST THAT ONE.
JUDGE DAVILA: OKAY. GIVE US JUST -- I'M SORRY, MR. DOWNEY.
MR. DOWNEY: NOT AT ALL.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: YOU KNOW, KASSIE, SHE SOMETIMES REBOOTS THE WHOLE SYSTEM.
COURT CLERK: YEAH, I'LL DO THAT NOW.
JUDGE DAVILA: OKAY.
(PAUSE IN PROCEEDINGS.)
MR. DOWNEY: YOU KNOW, YOUR HONOR, I CAN CHECK. I CAN SEE IF WE HAVE CLEAN COPIES OF THE DOCUMENTS, AND WE CAN DO IT OLD STYLE FOR THE TWO JURORS WHO DON'T HAVE ACCESS.
JUDGE DAVILA: SURE. LET'S SEE. IF YOU WANT TO CHECK, THAT WOULD BE HELPFUL. THANK YOU.
MR. DOWNEY: WELL, I'VE CHECKED AND I DON'T HAVE TWO CLEAN COPIES.
(LAUGHTER.)
JUDGE DAVILA: WELL, THERE'S SOME EFFICIENCY IN OLD SCHOOL.
MR. DOWNEY: YES. SURE. I'M SURE YOU THINK ABOUT IT THESE DAYS.
JUDGE DAVILA: WE'LL SEE IF WE CAN GET COPIES. IT LOOKS LIKE THE JURORS ARE SAYING THEY'RE GOING TO SHARE A MONITOR.
JUROR: THAT'S WHAT IT LOOKS LIKE.
JUDGE DAVILA: SO WE MAY HAVE TO WORK AROUND.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: LET ME ASK COUNSEL, WE HAVE COPIES. IS THERE ANY OBJECTION TO THE COURT PROVIDING COPIES TO THE AFFECTED JURORS THERE?
MR. BOSTIC: NO, YOUR HONOR. THANK YOU.
JUDGE DAVILA: MR. DOWNEY, ANY OBJECTION TO THAT?
MR. DOWNEY: I DON'T, YOUR HONOR. WE'LL SEE HOW WE CAN GET THROUGH THIS EXHIBIT, AND WE'LL SEE HOW THE NEXT ONE GOES.
JUDGE DAVILA: SURE. AND FOR THE RECORD, IT LOOKS LIKE THE CLERK HAS PROVIDED TWO COPIES TO SOME OF THE JURORS IN THE COURTROOM. THE MONITORS HAVE BEEN TURNED TO ALLOW ACCESS TO THOSE AFFECTED JURORS. ONLY ONE MONITOR IS OUT. I THINK YOU CAN CONTINUE NOW. THANK YOU.
MR. DOWNEY: THANK YOU.
MR. DOWNEY: DO YOU RECALL THAT MS. HOLMES TOLD YOU THAT THERANOS WAS IN THE PROCESS OF NEGOTIATING AGREEMENTS WITH RETAILERS?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU RECALL THAT SHE ALSO TOLD YOU IN THAT MARCH 2010 MEETING THAT THERANOS WAS CONSIDERING AN EQUITY OFFERING IN THERANOS STOCK?
ALAN EISENMAN: I'M A LITTLE CONFUSED. ARE YOU TALKING ABOUT AN EQUITY OFFERING TO ME?
MR. DOWNEY: NO. I'M TALKING ABOUT AN EQUITY OFFERING GENERALLY TO INVESTORS.
ALAN EISENMAN: I HAVE NOTES WHERE SHE WAS TALKING ABOUT AN IPO YEAR AFTER YEAR AFTER YEAR. IT'S COMING NEXT YEAR, IT'S COMING IN TWO YEARS, IT'S COMING NEXT YEAR. SO I HAVE A WHOLE TRAIL OF NOTES OVER A PERIOD OF YEARS THAT SHE WAS HINTING THERE WAS AN IPO AROUND THE CORNER.
MR. DOWNEY: I DIDN'T ASK YOU ABOUT AN IPO, MR. EISENMAN. I ASKED YOU ABOUT AN EQUITY OFFERING IN ANY FORM. DID SHE TELL YOU THERE WAS AN EQUITY OFFERING, PRIVATE, PUBLIC, INDIVIDUAL, GROUP, TO WHOMEVER? DID SHE TELL YOU IN MARCH OF 2010 THAT THERANOS WAS CONSIDERING AN EQUITY OFFERING IN 2010?
ALAN EISENMAN: MY RECOLLECTION WAS THAT THERE WAS DISCUSSION ABOUT AN EQUITY OFFERING TO ME, BUT I DON'T RECALL AN EQUITY OFFERING TO OTHERS OR TO THE PUBLIC.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT 2000 -- I'M SORRY, 14103, AND LOOK AT THE BOTTOM EMAIL ON PAGE 1, WHICH APPEARS TO BE AN EMAIL FROM YOU TO MS. HOLMES. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU SEE IN THE SECOND PARAGRAPH YOU SAY, "SINCE IT HAS BEEN 2 MONTHS SINCE WE TALKED, AND WILL PROBABLY BE ANOTHER MONTH UNTIL WE TALK AGAIN, I WAS WONDERING IF YOU COULD EMAIL ME A RESPONSE TO THE FOLLOWING ITEMS?" DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN YOU GO ON TO ASK HER A SERIES OF ITEMS FOLLOWING FROM THERE. IS THAT REFERRING BACK TO THE CONVERSATION THAT YOU HAD IN MARCH WITH MS. HOLMES?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. AND THEN YOU ASK HER FOR -- TO SCHEDULE A MEETING AND, IN THE INTERIM, TO GET THE INFORMATION THAT YOU'RE REQUESTING IN THE EMAIL; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN ABOUT A WEEK LATER, IF YOU GO TO THE EMAIL ABOVE, DO YOU SEE THAT THERE'S ANOTHER EMAIL FROM YOU ASKING FOR A RESPONSE?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN IF YOU GO TO THE TOP EMAIL, DO YOU SEE THERE'S A RESPONSE FROM MS. HOLMES TO YOU?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IF YOU LOOK AT THE SECOND SENTENCE OF THE FIRST PARAGRAPH, SHE SAYS, "AS YOU KNOW, WE DON'T DO QUARTERLY CALLS WITH OUR OTHER INVESTORS, MANY OF WHOM INVESTED MUCH GREATER AMOUNTS THAN YOU DID, AND I CANNOT COMMIT TO AN EXACT QUARTERLY SCHEDULE GOING FORWARD." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN DO YOU SEE IN THE SECOND PARAGRAPH SHE SAID, "AS DISCUSSED IN OUR CALL IN MARCH, WE CANNOT PROVIDE THE LEVEL OF COMMUNICATION YOU KEEP REQUESTING." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IT WAS IN THE MARCH MEETING THAT SHE TOLD YOU THAT THERE WOULD BE AN EQUITY OFFERING IN 2010 AND THAT THERANOS WAS IN THE PROCESS OF NEGOTIATIONS WITH RETAILERS; CORRECT?
ALAN EISENMAN: I DON'T RECALL THE EQUITY OFFERING DISCUSSION.
MR. DOWNEY: OKAY. AND IF YOU LOOK AT THE THIRD PARAGRAPH, SHE SAYS, "WITH THE DEALS WE ARE FORMALIZING WITH RETAILERS WE ARE NOW OBLIGATED NOT TO DISCLOSE OUR PRODUCTION VOLUMES AND CARTRIDGE SALE PRICES. I CANNOT PROVIDE YOU THE METRICS YOU ARE REQUESTING IN YOUR EMAIL." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: NOW, I THINK YOU TESTIFIED ON DIRECT THAT YOU WEREN'T EVEN CERTAIN WHAT RETAILERS THERANOS WAS NEGOTIATING WITH; IS THAT RIGHT?
ALAN EISENMAN: SHE HAD MENTIONED THE NAME WAL-MART, SHE HAD MENTIONED CVS. THERE WERE SOME NAMES THAT SHE HAD MENTIONED IN PRIOR CONVERSATIONS THAT I'M NOT -- I'M NOT CERTAIN WHICH RETAILER SHE WAS TALKING ABOUT IN THIS EMAIL.
MR. DOWNEY: OKAY. SO I TAKE IT THAT YOU DID NOT SEE ANY DOCUMENTS RELATED TO THAT NEGOTIATION?
ALAN EISENMAN: NO, I DIDN'T.
MR. DOWNEY: AND YOU DON'T KNOW WHETHER THERE WAS A RESTRICTION IMPOSED ON EITHER THE RETAILER OR ON THERANOS AS TO INFORMATION THAT IT COULD SHARE DURING THE PERIOD OF THOSE NEGOTIATIONS?
ALAN EISENMAN: I WASN'T AWARE.
MR. DOWNEY: AND YOU DON'T KNOW WHETHER, IN THE FINAL AGREEMENT THAT WAS SUBSEQUENTLY NEGOTIATED, WHETHER THERE WAS A RESTRICTION ON THE INFORMATION THAT THERANOS COULD SHARE?
ALAN EISENMAN: NO, I DON'T KNOW.
MR. DOWNEY: BECAUSE YOU'VE NEVER SEEN THAT AGREEMENT; RIGHT?
MR. DOWNEY: NOW, YOU UNDERSTAND ALSO, DO YOU NOT, THAT DURING THE PERIOD WHEN A COMPANY IS SELLING STOCK TO A GROUP OF INVESTORS, BE IT THE PUBLIC OR TO A SMALLER GROUP OF INVESTORS, THERE COULD BE RESTRICTIONS ON THE INFORMATION THAT IT'S IN A POSITION TO SHARE. YOU UNDERSTAND THAT, DON'T YOU?
ALAN EISENMAN: WELL, I'LL GO BACK TO MY EARLIER COMMUNICATION. I WAS NOT AWARE THAT THERE WAS ANY ATTEMPTS TO DO ANY KIND OF OFFERING. IT WAS NOT MENTIONED TO ME.
MR. DOWNEY: I DIDN'T ASK YOU ABOUT THIS OFFERING. I'M JUST ASKING YOU ABOUT YOUR GENERAL LEVEL OF KNOWLEDGE AS A SOPHISTICATED INVESTOR AND BROKER AND SO FORTH. YOU'RE AWARE THAT THERE ARE RESTRICTIONS ON THE INFORMATION THAT A COMPANY COULD SHARE WHEN IT'S DOING AN EQUITY OFFERING, AREN'T YOU?
ALAN EISENMAN: I AM AWARE OF THAT.
MR. DOWNEY: AND YOU'RE AWARE THAT IF A POTENTIAL INVESTOR RECEIVES INFORMATION THAT OTHER INVESTORS DON'T HAVE, THAT THAT INVESTOR MIGHT BE UNDER RESTRICTIONS AS TO WHETHER HE OR SHE CAN SHARE THAT INFORMATION; CORRECT?
ALAN EISENMAN: WELL, I WAS NOT MADE AWARE OF THE FACT THAT THEY WERE DOING ANY KIND OF EQUITY OFFERING, SO IT SEEMS LIKE THIS IS MOOT.
MR. DOWNEY: I'M NOT ASKING YOU ABOUT YOUR AWARENESS WITH RESPECT TO THERANOS. I'M ASKING YOU ABOUT WHAT YOU KNOW AS A SOPHISTICATED INVESTOR, SHAREHOLDER, INVESTMENT ADVISOR, PRIVATE INVESTOR, PUBLIC INVESTOR FOR 35 YEARS.
ALAN EISENMAN: SINCE I WAS NOT AWARE THAT THEY WERE ATTEMPTING TO DO ANY KIND OF OFFERING, I CAN'T REALLY RESPOND TO THE QUESTION. I WILL ALSO SAY THAT AS AN INVESTOR IN OTHER PRIVATE COMPANIES, I HAVE SIGNED A NONDISCLOSURE AGREEMENT SO I COULD BE PRIVY TO THOSE KINDS OF CONVERSATIONS AND PROMISE NOT TO DISCLOSE TO ANYBODY.
MR. DOWNEY: I UNDERSTAND THAT. I MOVE TO STRIKE THAT ANSWER. AND I'LL ASK YOU THE SAME QUESTION FOR A THIRD TIME.
JUDGE DAVILA: I'LL STRIKE THAT. THE LAST RESPONSE WAS STRICKEN. MR. DOWNEY, IF YOU COULD ASK YOUR ORIGINAL QUESTION AGAIN, PLEASE. JUST LISTEN TO HIS ORIGINAL QUESTION.
ALAN EISENMAN: I'M TRYING. THANK YOU.
BY MR. DOWNEY:
MR. DOWNEY: THE QUESTION IS, YOU ARE AWARE THAT THERE ARE RESTRICTIONS ON THE INFORMATION THAT A COMPANY CAN SHARE DURING THE PERIOD WHERE IT IS MAKING AN EQUITY OFFERING, AREN'T YOU?
ALAN EISENMAN: AS A GENERAL RULE, YES.
MR. DOWNEY: OKAY. AND YOU'RE ALSO AWARE, ARE YOU NOT, THAT IF A POTENTIAL INVESTOR, OR INVESTOR, DISCOVERS INFORMATION ABOUT THAT COMPANY THAT OTHER POTENTIAL INVESTORS DON'T HAVE, THAT THAT INVESTOR MIGHT BE UNDER RESTRICTION AS TO WHETHER IT CAN SHARE THAT INFORMATION; CORRECT?
ALAN EISENMAN: I'M SORRY. I'M STILL NOT FOLLOWING THIS, BECAUSE I WAS NOT GIVEN ANY INFORMATION THAT THEY WERE ATTEMPTING TO DO ANY KIND OF OFFERING, SO THAT WOULD NOT RESTRICT ME FROM GAINING INFORMATION. IT'S NOT, YOU KNOW, PRIVY TO OTHER PEOPLE.
JUDGE DAVILA: MR. EISENMAN, I THINK HE'S JUST ASKING YOU, DISASSOCIATED FROM YOUR INVESTMENT, JUST YOUR KNOWLEDGE ABOUT GENERAL CONCEPTS.
ALAN EISENMAN: OKAY. DISASSOCIATED WITH THIS INVESTMENT WITH THERANOS, AS A GENERAL STATEMENT, YES, THAT IS CORRECT.
MR. DOWNEY: YOUR HONOR, I MOVE TO STRIKE THE PRIOR ANSWER TO MY QUESTION.
JUDGE DAVILA: WELL, THE PRIOR ANSWER IS STRICKEN. LADIES AND GENTLEMEN, THE LAST RESPONSE AFTER MY INTERJECTION -- AND LET ME ASK YOU, WAS MY INTERJECTION APPROPRIATE FOR YOUR QUESTION?
MR. DOWNEY: IT WAS, YOUR HONOR, AND I THINK THAT THE QUESTION AND ANSWER CAN REMAIN --
JUDGE DAVILA: ALL RIGHT. THANK YOU.
MR. DOWNEY: -- IN THE TRANSCRIPT.
JUDGE DAVILA: THANK YOU. AND YOU CAN ASK ANOTHER QUESTION. THANK YOU.
MR. DOWNEY: ALL RIGHT.
MR. DOWNEY: NOW, FOLLOWING ON THIS EMAIL IN WHICH MS. HOLMES TOLD YOU SHE COULD NOT PROVIDE THE LEVEL OF INFORMATION THAT YOU WERE REQUESTING, YOU CONTINUED TO REQUEST INFORMATION FROM THERANOS, DID YOU NOT?
ALAN EISENMAN: YES.
MR. DOWNEY: LET ME ASK YOU TO LOOK IN THE BLACK NOTEBOOK THAT YOU HAVE AT EXHIBIT 12285. YOU KNOW, MR. EISENMAN, I APOLOGIZE. I'M GOING TO HAVE YOU LOOK AT A DIFFERENT EXHIBIT.
ALAN EISENMAN: OKAY.
MR. DOWNEY: LET ME ASK YOU TO LOOK FIRST AT THE EXHIBIT THAT IS MARKED AS 14225.
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND DO YOU SEE THAT THIS IS ALSO A SERIES OF EMAIL EXCHANGES BETWEEN YOURSELF AND MS. HOLMES RELATED TO YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 14225.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 14225 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU GO TO THE BOTTOM OF PAGE 2, THERE'S AN EMAIL EXCHANGE FROM YOU TO MS. HOLMES AND OTHERS ARE COPIED; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THAT'S DATED JULY 13TH, 2010. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THE EMAIL SAYS, "ELIZABETH, "I HEARD YESTERDAY THAT YOU COMPLETED AN EQUITY OFFERING." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND MS. HOLMES RESPONDS TO YOUR EMAIL IN THE EMAIL ABOVE BY SAYING, "PER MY PREVIOUS EMAIL, I WILL CALL YOU AS SOON AS WE HAVE SOMETHING CONCRETE." YOU THEN MOVE UP ABOVE THAT EMAIL AND THERE'S ANOTHER SERIES OF EMAIL EXCHANGES. YOU SAY IN THE EMAIL ABOVE THAT, "ELIZABETH, "I AM REALLY TRYING TO KEEP MY EMAILS TO A MINIMUM. CAN YOU RESPOND TO MY INQUIRY BELOW ABOUT THE PRICING OF THE EQUITY ROUND, AND IF THE OFFER TO BUY OUR STOCK IS DELAYED UNTIL YEAR END?" AND THEN YOU SENT ANOTHER EMAIL THAT I THINK IS GENERALLY JUST A REMINDER ABOVE THAT, OR A FURTHER REQUEST, IF YOU WILL. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN THERE'S A FEW MORE EMAILS ALONG THOSE LINES. AND THEN AT THE TOP OF THE PAGE 1, DO YOU SEE THAT MS. HOLMES RESPONDS TO THE EMAILS THAT YOU HAD SENT TO HER?
ALAN EISENMAN: YES.
MR. DOWNEY: LET'S TAKE A LOOK AT THAT EMAIL. SHE SAYS, "ALAN, "YOUR CONTINUED DAILY CALLS AND EMAILS --" NOW, IS IT TRUE THAT YOU WERE CALLING AND EMAILING THE COMPANY DAILY?
ALAN EISENMAN: THAT'S AN EXAGGERATION.
MR. DOWNEY: BUT YOU ACKNOWLEDGE THAT YOU WERE EMAILING AND CALLING THE COMPANY AND ASKING FOR INFORMATION FREQUENTLY? IS THAT FAIR?
ALAN EISENMAN: SEMI FAIR. IT WAS FREQUENTLY BECAUSE I WASN'T GETTING RESPONSES, SO I WOULD FOLLOW UP.
MR. DOWNEY: AND MS. HOLMES GOES ON TO SAY, "WE'VE ALREADY TOLD YOU WE DO NOT HAVE ADDITIONAL INFORMATION WE CAN DISCLOSE BEYOND WHAT WE'VE ALREADY SHARED WITH DAVID ARE UPSETTING TO US." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DAVID IS A REFERENCE TO MR. HARRIS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND MR. HARRIS WAS AN INDIVIDUAL WHO HAD FIRST INTRODUCED YOU TO THERANOS; IS THAT RIGHT?
ALAN EISENMAN: THAT'S CORRECT.
MR. DOWNEY: AND MS. HOLMES WOULD FREQUENTLY TALK TO MR. HARRIS ABOUT THERANOS; CORRECT?
ALAN EISENMAN: I DON'T KNOW IF IT WAS FREQUENT. MY UNDERSTANDING IS THAT IT WAS INFREQUENT.
MR. DOWNEY: BUT YOU WOULD SOMETIMES FIND OUT INFORMATION FROM MS. HOLMES ABOUT MR. HARRIS?
ALAN EISENMAN: THAT'S FAIR.
MR. DOWNEY: AND SHE GOES ON TO SAY, "ONCE WE HAVE ADDITIONAL INFORMATION WE CAN SHARE WITH YOU WE WILL CONTACT YOU AS MENTIONED MULTIPLE TIMES BEFORE -- YOU'RE NOT GETTING A RESPONSE BECAUSE IT IS NOT AN EFFECTIVE USE OF OUR TIME TO KEEP REPEATING THIS." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU UNDERSTAND THAT SHE WAS FRUSTRATED WITH THE FACT THAT SHE TOLD YOU SHE WAS NOT IN A POSITION TO DISCLOSE THIS INTERNAL INFORMATION ABOUT THERANOS?
MR. BOSTIC: CALLS FOR SPECULATION. FOUNDATION.
MR. DOWNEY: IF YOU KNOW ONE WAY OR ANOTHER.
JUDGE DAVILA: I'LL ALLOW HIM TO ANSWER THAT QUESTION.
ALAN EISENMAN: COULD YOU REPEAT THE QUESTION, PLEASE.
BY MR. DOWNEY:
MR. DOWNEY: DID YOU UNDERSTAND THAT SHE WAS FRUSTRATED THAT YOU KEPT ASKING HER FOR INFORMATION THAT SHE HAD ALREADY TOLD YOU THAT SHE WASN'T IN A POSITION TO DISCLOSE?
ALAN EISENMAN: NO. I UNDERSTOOD THAT SHE WAS HIDING INFORMATION THAT I SHOULD KNOW AS A SHAREHOLDER.
MR. DOWNEY: I SEE. I MOVE TO STRIKE THAT.
JUDGE DAVILA: WELL, I THINK THAT'S HIS ANSWER, MR. DOWNEY.
MR. DOWNEY: WELL, HE DOESN'T HAVE ANY BASIS TO KNOW THAT SHE WAS HIDING INFORMATION.
ALAN EISENMAN: I CAN ELABORATE IF YOU WANT ME TO.
JUDGE DAVILA: EXCUSE ME, SIR. THAT WAS HIS OPINION OF HIS UNDERSTANDING.
MR. DOWNEY: FAIR ENOUGH.
MR. DOWNEY: LET ME ASK YOU TO GO FORWARD FROM THERE AND TO TAKE A LOOK AT 14224, WHICH SHOULD BE JUST BEFORE WE WERE IN YOUR EMAIL. AND IF YOU LOOK AT EXHIBIT 14224, THIS IS AN EMAIL BETWEEN YOU AND MS. HOLMES ALSO FROM JULY OF 2010. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THIS CONCERNS YOUR INVESTMENT IN THERANOS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 14224.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 14224 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND IF YOU LOOK AT EXHIBIT 14224, IT'S AN EMAIL FROM YOU TO MS. HOLMES; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU SAY IN THE FIRST SENTENCE OF 14224, "I HAVEN'T MADE A DECISION WHETHER TO SELL STOCK." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THAT WAS A COMMENT ON THE FACT THAT MS. HOLMES HAD TOLD YOU THAT THERANOS WAS WILLING TO BUY YOUR STOCK BACK BECAUSE OF YOUR FRUSTRATION WITH THE COMPANY; CORRECT?
ALAN EISENMAN: IT'S A LITTLE MORE COMPLICATED THAN THAT.
MR. DOWNEY: OKAY. WELL, WE'LL TALK ABOUT THAT.
ALAN EISENMAN: I'LL BE HAPPY TO ELABORATE IF I'M ALLOWED TO.
MR. DOWNEY: WELL, WE'LL TALK ABOUT THE OFFER TO BUY YOUR STOCK IN A LITTLE BIT. AND YOU TRIED TO SCHEDULE ANOTHER CALL. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND, NOW, DO YOU KNOW IF OTHERS WERE BUYING STOCK AT THERANOS AT THE SAME TIME?
ALAN EISENMAN: I WASN'T AWARE.
MR. DOWNEY: OKAY. ALL RIGHT. LET ME ASK YOU NEXT TO LOOK AT EXHIBIT 14226. DO YOU HAVE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU SEE THAT THIS IS ALSO AN EMAIL BETWEEN YOU AND MS. HOLMES CONCERNING YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 14226.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 14226 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IS EXHIBIT 14226 ANOTHER EMAIL FROM YOU TO MS. HOLMES --
ALAN EISENMAN: YES.
MR. DOWNEY: -- DISCUSSING YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU SEE IN THE TOP OF THE EMAIL -- I'M SORRY, IN THE BOTTOM EMAIL YOU SAY, "ELIZABETH, "I NOTICED THAT LARRY IS NOT CURRENTLY LISTED AS A DIRECTOR." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THAT WAS A REFERENCE TO LARRY ELLISON, RIGHT, WHO IS THE SUBJECT OF THE EMAIL?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU HAD RECEIVED A COMMUNICATION WHICH INDICATED THAT MR. ELLISON WAS NO LONGER A BOARD MEMBER; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU GO ON TO SAY, "DID HE GO OFF THE BOARD? IF SO, WHY? ALSO, DO YOU HAVE ANY VISIBILITY WHEN WE WILL RECEIVE INFORMATION," ET CETERA. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN DO YOU SEE ABOVE THAT MS. HOLMES TELLS YOU "I RECEIVED THIS EMAIL FROM SATURDAY AS WELL -- AT THIS POINT, PER OUR CALL, THERE IS NO NEW INFORMATION TO BE SHARED WITH OUR INVESTOR BASE. AS DISCUSSED, WHEN WE COMMUNICATE ANYTHING WITH OUR INVESTOR BASE, YOU WILL BE INCLUDED ON THOSE COMMUNICATIONS AS WELL." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THERE HAD BEEN A COMMUNICATION WITH THE INVESTOR BASE THAT WAS ALSO COMMUNICATED TO YOU ABOUT WHO THE BOARD MEMBERS WERE; RIGHT?
ALAN EISENMAN: PRESUMABLY SO. I DON'T RECALL.
MR. DOWNEY: OKAY. AND YOU HAD BEEN INCLUDED ON THAT COMMUNICATION?
ALAN EISENMAN: I'M SAYING PRESUMABLY SO. I DON'T RECALL.
MR. DOWNEY: OKAY. NOW, IS IT FAIR TO SAY FROM THE TESTIMONY THAT YOU GAVE ON WEDNESDAY OF LAST WEEK THAT YOU FELT FRUSTRATED BY THE FACT THAT YOU COULDN'T GET INFORMATION FROM THERANOS INDIVIDUALLY? IS THAT FAIR TO SAY?
ALAN EISENMAN: INDIVIDUALLY AND COLLECTIVELY. MY GROUP WAS ALSO TRYING TO GET INFORMATION AND THEY WERE SIMILARLY FRUSTRATED.
MR. DOWNEY: OKAY. BUT YOU, YOU -- IF THERANOS COMMUNICATED WITH INVESTORS GENERALLY, YOU WERE INCLUDED ON THOSE COMMUNICATIONS; CORRECT?
ALAN EISENMAN: WELL, THE ISSUE WAS THE LACK OF COMMUNICATION. IT WAS A LONG PERIOD OF TIME WHERE THERE WAS NO COMMUNICATION.
MR. DOWNEY: I'M SORRY. I HAD ASKED YOU IF THERANOS HAD COMMUNICATED GENERALLY WITH ITS INVESTORS. YOU WERE INCLUDED IN THOSE COMMUNICATIONS?
ALAN EISENMAN: THERE WAS NO COMMUNICATIONS TO INVESTORS GENERALLY EITHER.
MR. DOWNEY: WELL, DIDN'T WE JUST LOOK AT AN EMAIL IN WHICH YOU ACKNOWLEDGED THAT THE CHANGE IN BOARD MEMBERS HAD BEEN COMMUNICATED TO YOU?
ALAN EISENMAN: AS I SAID EARLIER, I DON'T RECALL WHERE I GOT THAT INFORMATION. THAT MIGHT HAVE BEEN FROM A CONVERSATION WITH ELIZABETH AND DAVID HARRIS. I DON'T RECALL WHERE THAT INFORMATION CAME FROM.
MR. DOWNEY: OKAY.
ALAN EISENMAN: I DON'T THINK THEY COMMUNICATED THAT TO THEIR INVESTOR BASE.
MR. DOWNEY: OKAY. NOW, WE WERE TALKING FRIDAY ABOUT THE ISSUE OF YOUR RIGHTS TO OBTAIN THE KIND OF INFORMATION THAT YOU WERE SEEKING TO OBTAIN FROM THE COMPANY. DO YOU REMEMBER THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU UNDERSTOOD THAT THE COMPANY DIDN'T HAVE ANY OBLIGATION TO UPDATE YOU WITH THE KIND OF FREQUENT AND SPECIFIC INFORMATION THAT YOU WERE REPEATEDLY REQUESTING? YOU UNDERSTOOD THAT, DIDN'T YOU?
ALAN EISENMAN: I THINK, AS I RECALL, I DON'T HAVE A LEGAL RIGHT, BUT AS A PRACTICAL MATTER, EVERY OTHER PRIVATE COMPANY I INVEST IN ARE HAPPY TO TALK TO YOU, AND THIS WAS AN UNUSUAL FENCE BETWEEN MANAGEMENT AND SHAREHOLDERS FOR AN EXTENDED PERIOD OF TIME.
MR. DOWNEY: I MOVE TO STRIKE EVERYTHING AFTER "LEGAL RIGHT." ALL RIGHT. LADIES AND GENTLEMEN, I'LL STRIKE THE RESPONSE AFTER "I THINK, AS I RECALL, I DON'T HAVE A LEGAL RIGHT." EVERYTHING AFTER THAT IS STRICKEN.
BY MR. DOWNEY:
MR. DOWNEY: ALL RIGHT. LET'S LOOK AT ONE LAST DOCUMENT IN THIS 2010, 2011 TIMEFRAME, WHICH IS EXHIBIT 12185. DO YOU HAVE THAT ONE?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IS THIS A SERIES OF EXCHANGES BETWEEN YOU AND MR. BALWANI RELATED TO YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU UNDERSTOOD THAT MR. BALWANI HAD JOINED THE COMPANY AS AN EXECUTIVE AT SOME POINT PRIOR TO 2011; CORRECT?
ALAN EISENMAN: I'M NOT SURE WHEN HE JOINED THE COMPANY.
MR. DOWNEY: OKAY.
ALAN EISENMAN: MY UNDERSTANDING IS THAT HE JOINED IT MUCH EARLIER, BUT WE WERE NOT MADE AWARE OF THAT.
MR. DOWNEY: OKAY. BUT AT THE TIME THAT YOU WERE COMMUNICATING WITH HIM IN 2011, YOU UNDERSTOOD THAT HE WAS A THERANOS EXECUTIVE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, YOU GO ON TO -- YOU ASK IN THE VERY BOTTOM EMAIL, AND YOU ASK AGAIN FOR ANOTHER CALL. DO YOU SEE THAT ON THE JANUARY 31ST EMAIL AND THE LAST EMAIL ON PAGE 2?
ALAN EISENMAN: I SEE A FEBRUARY 1ST -- OH, JANUARY 31ST. OKAY.
MR. DOWNEY: DO YOU SEE THAT?
ALAN EISENMAN: YES, I DO.
MR. DOWNEY: YOUR HONOR, I SHOULD HAVE ADMITTED THIS DOCUMENT IF I CAN.
MR. DOWNEY: THIS IS ANOTHER EMAIL RELATED TO YOUR INVESTMENT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOUR HONOR, I MOVE EXHIBIT 12185.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 12185 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND I WAS JUST, FOR THE BENEFIT, I WAS JUST SHOWING YOU THE FIRST EMAIL IN THE SERIES OF EMAILS. AND IT'S JUST ANOTHER EMAIL FROM YOU ASKING FOR UPDATES AND INFORMATION ABOUT THE COMPANY; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN MR. BALWANI RESPONDED TO THAT ABOVE THAT. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND MR. BALWANI SAID, "THERE IS NO QUARTERLY UPDATE WE PROVIDE. AS MENTIONED TO YOU BEFORE, WE WILL SEND UPDATES TO ALL INVESTORS AT THE SAME TIME." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN YOU, YOU DON'T RESPOND TO -- YOU DON'T ADDRESS MR. BALWANI WHEN YOU RESPOND. INSTEAD, YOU ADDRESSED MS. HOLMES IN THE LAST FULL EMAIL ON PAGE 1. AND YOU SAY THERE -- YOU ACKNOWLEDGE IN THE LAST SENTENCE, "I UNDERSTAND YOU DON'T HAVE AN OBLIGATION TO UPDATE US, BUT IT WOULD BE APPRECIATED IF YOU WOULD ARRANGE A CALL." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN YOU EMAILED AGAIN, RIGHT, IN THE EMAIL ABOVE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN ABOVE THAT MR. BALWANI HAD ALREADY TOLD YOU HE RESPONDED; CORRECT?
ALAN EISENMAN: HE DIDN'T REALLY RESPOND, BUT OKAY.
MR. DOWNEY: WELL, HE TOLD YOU HE RESPONDED; CORRECT?
ALAN EISENMAN: HE SAID HE RESPONDED, BUT HE DIDN'T RESPOND.
MR. DOWNEY: OKAY. YOU WEREN'T SATISFIED WITH HIS RESPONSE, BUT HE TOLD YOU THAT YOU HAD GOTTEN THE RESPONSE THAT YOU WERE GOING TO GET; CORRECT?
ALAN EISENMAN: THAT'S RIGHT.
MR. DOWNEY: NOW, BECAUSE YOU WANTED TO GET INFORMATION EITHER PERSONALLY OR AS A GROUP WITH THE OTHER -- LET ME USE -- AGREE ON A TERM WITH YOU IS I'M GOING TO CALL YOU AND MR. HARRIS AND THE OTHER INDIVIDUALS FROM HOUSTON WHO INVESTED, THE HOUSTON INVESTORS JUST. OKAY? JUST SO I DON'T HAVE A --
ALAN EISENMAN: OKAY.
MR. DOWNEY: SO YOU WANTED TO GET AN UPDATE EITHER FOR YOURSELF OR FOR THE HOUSTON INVESTORS; IS THAT FAIR?
ALAN EISENMAN: THAT'S FAIR.
MR. DOWNEY: AND WHEN THERANOS TOLD YOU THAT IT WOULDN'T COMMUNICATE WITH THAT GROUP WITHOUT COMMUNICATING WITH THE WHOLE INVESTOR BASE, YOU WENT DIRECTLY TO THERANOS'S BOARD; CORRECT?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: WELL, DIDN'T YOU TELL US ON WEDNESDAY THAT YOU MADE EFFORTS TO TRY TO CONTACT THE CHAIRMAN OF THE BOARD, DON LUCAS?
ALAN EISENMAN: I DON'T HAVE THE TIMEFRAME, BUT THERE WERE SOME CONVERSATIONS THAT I HAD WITH DON, AND DON WAS VERY WILLING TO SHARE INFORMATION.
MR. DOWNEY: OKAY. LET ME SHOW YOU AN EMAIL THAT IS MARKED EXHIBIT 12252. DO YOU KNOW WHO -- DO YOU SEE THE NAME THERE NANCY MINNIG, M-I-N-N-I-G?
ALAN EISENMAN: I DO.
MR. DOWNEY: AND DO YOU KNOW WHO MS. MINNIG WAS?
ALAN EISENMAN: I THINK SHE WAS THE EXECUTIVE ASSISTANT FOR DON LUCAS; IS THAT CORRECT?
MR. DOWNEY: AND THIS IS AN EMAIL EXCHANGE BETWEEN YOU AND MS. MINNIG RELATED TO THE ISSUES THAT WE'VE BEEN TALKING ABOUT AT THERANOS; CORRECT?
ALAN EISENMAN: WHICH EMAIL ARE YOU REFERRING TO?
MR. DOWNEY: THE EMAIL EXCHANGE FROM -- THERE ARE TWO EMAILS ON THE DOCUMENT THAT IS 12252, AND BOTH OF THEM ARE EMAIL EXCHANGES BETWEEN YOU AND MS. MINNIG; CORRECT?
ALAN EISENMAN: I'M SORRY, I'M ON THE WRONG TAB. 12252?
MR. DOWNEY: YES, SIR.
ALAN EISENMAN: YES.
MR. DOWNEY: DO YOU HAVE THAT NOW?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU RECOGNIZE THOSE AS EMAIL EXCHANGES BETWEEN YOU AND MS. MINNIG RELATED TO YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. AND IF YOU LOOK AT THE BOTTOM EMAIL, IT BEGINS, "HI ALAN, MY APOLOGIES FOR NOT GETTING BACK TO YOU." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THAT APPEARS TO BE THAT YOU HAD TRIED TO CONTACT MS. MINNIG AND SHE HAD NOT, AT LEAST FOR SOME PERIOD OF TIME, RESPONDED TO YOU. DO YOU SEE THAT?
ALAN EISENMAN: COULD YOU ASK THE QUESTION AGAIN.
MR. DOWNEY: I'M JUST ASKING YOU TO TELL US WHEN SHE SAID, "MY APOLOGIES FOR NOT GETTING BACK TO YOU," DO YOU KNOW WHAT THAT REFERRED TO?
ALAN EISENMAN: NOT EXACTLY.
MR. DOWNEY: BUT YOU AGREE WITH ME THAT IT APPEARS THAT YOU HAD EITHER CALLED OR EMAILED AND SHE HADN'T RESPONDED FOR A WHILE AND SHE WAS APOLOGIZING. DO YOU SEE THAT?
ALAN EISENMAN: I DO SEE THAT.
MR. DOWNEY: OKAY. AND THEN SHE CONVEYS TO YOU THAT SHE SPOKE TO MR. LUCAS; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND HE DOESN'T HAVE ANY FURTHER INFORMATION; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND HE TOLD YOU, HE CONVEYED THAT THERE WERE ARTICLES IN THE NEWS, AS YOU HAD MENTIONED; CORRECT?
ALAN EISENMAN: YOU KNOW, I DON'T RECALL THIS. THERE WAS SOME ARTICLES IN THE NEWS ABOUT MOVING TO A NEW HEADQUARTERS. I'M NOT SURE IF THAT IS WHAT THIS IS REFERRING TO. IF YOU'RE ALLOWED TO REFRESH MY MEMORY. IS THIS THE POINT IN TIME WHEN THEY MOVED TO THEIR NEW HEADQUARTERS?
MR. DOWNEY: WELL, I COME NOT ALLOWED TO REFRESH YOU AND IN ANY EVENT I'M NOT SURE I COULD.
ALAN EISENMAN: OKAY.
MR. DOWNEY: BUT LET ME DO THIS, LET ME ADMIT 12252.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 11253 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: LET ME HIGHLIGHT THE BOTTOM EMAIL. DO YOU SEE THAT SHE SAYS, "MY APOLOGIES FOR NOT GETTING BACK TO YOU"?
ALAN EISENMAN: YES.
MR. DOWNEY: AND SHE GOES ON TO SAY THAT SHE SPOKE TO DON?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THAT'S A REFERENCE TO DON LUCAS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND SHE SAID HE DOESN'T HAVE ANY FURTHER INFORMATION; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN SHE SAID WHATEVER THE SUBJECT MATTER WAS, THERE WAS ARTICLES IN THE NEWS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND SHE HAD MENTIONED THAT YOU HAD TOLD HER THAT YOU WERE AWARE OF THOSE ARTICLES; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND MR. LUCAS SUGGESTED THAT YOU FOLLOW THE COMPANY IN THAT MANNER; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND HE SAID IF THERE WAS INFORMATION HE COULD SHARE WITH YOU, THEY WILL; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: ALL RIGHT. NOW, AT SOME POINT YOU LEARNED THAT MR. LUCAS HAD CONVEYED TO MS. HOLMES, AND OTHERS AT THERANOS, THAT YOU WERE CALLING AND EMAILING HIM SEEKING INFORMATION. YOU CAME TO UNDERSTAND THAT, DIDN'T YOU?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU GOT A RESPONSE FROM MS. HOLMES RELATED TO THAT; CORRECT?
ALAN EISENMAN: I'LL HAVE TO SEE THE RESPONSE. I DON'T RECALL.
MR. DOWNEY: OKAY. WELL, LET ME ASK YOU TO LOOK AT EXHIBIT 713. DO YOU HAVE THAT? IF NOT, I COULD GIVE YOU A COPY.
ALAN EISENMAN: 713?
MR. DOWNEY: YES, SIR.
ALAN EISENMAN: I DON'T HAVE IT.
MR. DOWNEY: OKAY. MAY I APPROACH THE WITNESS, YOUR HONOR?
JUDGE DAVILA: YES. DO YOU HAVE COPIES FOR COUNSEL AND THE COURT?
MR. DOWNEY: I THINK THEY INTRODUCED THIS EXHIBIT.
JUDGE DAVILA: IT'S A GOVERNMENT EXHIBIT?
MR. DOWNEY: YES.
MR. DOWNEY: (HANDING.) HERE YOU GO. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. YOUR HONOR, THIS DOCUMENT IS ALREADY IN EVIDENCE, BUT I'M NOT SURE THAT THE VERSION THAT HE HAS, HAS THE REDACTIONS THAT WE AGREED TO. BUT I WILL JUST SHOW UNREDACTED PORTIONS FOR PURPOSES OF THE JURY.
JUDGE DAVILA: I'M SORRY, UNREDACTED?
MR. DOWNEY: THE PORTION THAT THE COURT HAS DIRECTED SHOULD BE PUBLISHED AND NOT THE PORTIONS THAT SHOULD BE REDACTED.
JUDGE DAVILA: ALL RIGHT. THAT'S WHAT THE JURY HAS NOW?
MR. DOWNEY: THAT'S WHAT THE JURY IS LOOKING AT NOW.
JUDGE DAVILA: ALL RIGHT.
BY MR. DOWNEY:
MR. DOWNEY: WOULD YOU LOOK AT THE EMAIL THAT IS AT NOVEMBER 26TH, 2012, AT 2:10 P.M. AT THE BOTTOM OF PAGE 1?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. AND THIS WAS YOU CONTACTING MS. MINNIG AGAIN; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU WERE REACTING TO AN EMAIL THAT MS. HOLMES HAD SENT YOU IN CONNECTION WITH THE FACT THAT YOU WERE COMMUNICATING WITH MR. LUCAS AND SENDING EMAILS TO HIM AND CALLING AND SO FORTH; RIGHT?
ALAN EISENMAN: I'M SORRY, WHAT'S THE QUESTION?
MR. DOWNEY: THE QUESTION IS WHETHER YOUR EMAIL TO MS. MINNIG IS YOUR REACTION TO MS. HOLMES SENDING YOU AN EMAIL ABOUT YOUR EFFORTS TO COMMUNICATE WITH MR. LUCAS?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. AND IF YOU GO BELOW THAT TO THE TOP OF PAGE 2, BUT BELOW IN THE CHAIN. ACTUALLY, GO TO THE EMAIL BELOW THAT. AND IF YOU LOOK AT THE FIRST LINE OF YOUR EMAIL IT SAYS, "IT HAS BEEN OVER 2 YEARS SINCE YOU HAVE COMMUNICATED WITH YOUR INVESTORS." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IF YOU GO TO HER EMAIL ABOVE SHE RESPONDS AND SAYS TO YOU, "NO, ALAN, IT HAS BEEN ABOUT THAT LONG SINCE YOU DECIDED TO START HARASSING OUR CHAIRMAN, DESPITE THE FACT WE COMMUNICATED MULTIPLE TIMES THAT IF WE DID SO, WE WOULD NO LONGER RESPOND TO YOUR REQUESTS TO TALK WITH YOU IN LIGHT OF ALL OF OUR PAST INTERACTIONS." DO YOU SEE THAT?
ALAN EISENMAN: THAT'S A TOTAL MISCHARACTERIZATION. I NEVER HARASSED DON LUCAS. WE HAD A VERY NICE RELATIONSHIP UNTIL COMMUNICATION WAS CUT OFF PRESUMABLY FROM ELIZABETH.
MR. DOWNEY: OKAY. BUT YOU SAY THIS IS WHAT SHE WAS CONVEYING, HER UNDERSTANDING OF THE SITUATION?
ALAN EISENMAN: TOTAL MISCHARACTERIZATION. I DO SEE THAT. I'M NOT AGREEING THAT THAT'S ACCURATE.
MR. DOWNEY: AND DO YOU SEE IN THE SECOND PARAGRAPH SHE SAYS THAT SHE'LL BE TALKING TO DAVID AGAIN. DO YOU SEE THAT?
(CELL PHONE RINGING.)
JUDGE DAVILA: JUST A SECOND. SOMEONE'S DEVICE JUST WENT OFF. IF YOU COULD DISABLE IT OR LEAVE THE COURTROOM, PLEASE. I'M SORRY FOR THE INTERRUPTION, MR. DOWNEY.
MR. DOWNEY: I APOLOGIZE, MR. EISENMAN.
MR. DOWNEY: I WAS JUST DIRECTING YOUR ATTENTION TO THE SECOND PARAGRAPH WHERE MS. HOLMES SAYS SHE WILL BE TALKING TO DAVID AGAIN. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THAT'S A REFERENCE TO MR. HARRIS AGAIN?
ALAN EISENMAN: THAT IS.
MR. DOWNEY: SO SHE WAS COMMUNICATING WITH HIM; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. NOW, AFTER MR. LUCAS DECLINED TO COMMUNICATE WITH YOU, YOU WENT TO OTHER MEMBERS OF THE THERANOS BOARD ASKING FOR INFORMATION; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOU APPROACHED MR. FRIST; CORRECT?
ALAN EISENMAN: THAT IS CORRECT.
MR. DOWNEY: AND MR. FRIST WAS THE FORMER SENATOR, BILL FRIST; IS THAT CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND HE WAS THE FORMER MAJORITY LEADER IN THE SENATE; IS THAT CORRECT?
ALAN EISENMAN: THAT IS CORRECT.
MR. DOWNEY: AND ALSO A VERY RESPECTED SURGEON AND PHYSICIAN; CORRECT?
ALAN EISENMAN: THAT IS CORRECT.
MR. DOWNEY: AND YOU KNEW MR. FRIST -- WELL, YOU DIDN'T KNOW MR. FRIST PERSONALLY YOURSELF, RIGHT, AT THE TIME HE CONTACTED YOU?
ALAN EISENMAN: HE'S A FAMILY FRIEND. I DIDN'T KNOW HIM PERSONALLY.
MR. DOWNEY: HE'S A FRIEND OF YOUR FATHER-IN-LAW; CORRECT?
ALAN EISENMAN: THAT IS CORRECT.
MR. DOWNEY: AND BECAUSE SENATOR FRIST IS FROM TENNESSEE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOUR FATHER-IN-LAW LIVED IN TENNESSEE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOUR FATHER-IN-LAW IS A SUBSTANTIAL FIGURE IN TENNESSEE; CORRECT?
ALAN EISENMAN: I'D RATHER NOT COMMENT.
MR. DOWNEY: WELL, HE'S A, HE'S A -- HE'S AN EXTREMELY WEALTHY INDIVIDUAL IN TENNESSEE; CORRECT?
ALAN EISENMAN: I'M NOT GOING TO COMMENT.
MR. DOWNEY: WELL, YOU RECOGNIZE HIM TO BE ACTIVE IN MAKING POLITICAL CONTRIBUTIONS AND ACTIVE AROUND POLITICS; CORRECT?
ALAN EISENMAN: I RECOGNIZE HIM BEING VERY PHILANTHROPIC. AS FAR AS POLITICAL CONTRIBUTIONS, I'M NOT AWARE.
MR. DOWNEY: AND YOU WERE REACHING OUT TO MR. FRIST REFERENCING YOUR RELATIONSHIP WITH YOUR FATHER-IN-LAW; CORRECT?
ALAN EISENMAN: THIS IS INTERESTING BECAUSE I REACHED OUT TO HIM AS A FAMILY FRIEND, AND IT WAS A CONFIDENTIAL COMMUNICATION, AND HOW IT MADE IT INTO THE DOMAIN OF THERANOS IS A LITTLE BIT IRREGULAR.
MR. DOWNEY: WELL, THAT'S RIGHT. YOU REACHED OUT TO HIM ON A CONFIDENTIAL BASIS LETTING HIM KNOW THAT YOU WERE THE SON-IN-LAW OF JOEL GORDON, YOUR FATHER-IN-LAW; CORRECT?
ALAN EISENMAN: THAT IS CORRECT.
MR. DOWNEY: BUT YOU TOLD HIM YOU DIDN'T WANT MR. GORDON TO KNOW THAT YOU WERE REACHING OUT TO HIM; CORRECT?
ALAN EISENMAN: MISLEADING.
MR. DOWNEY: OKAY. WELL, LET'S LOOK AT EXHIBIT 2470. THIS MAY BE ANOTHER ONE I HAVE TO HAND TO YOU. I DON'T THINK IT'S IN YOUR BLACK -- IS IT IN YOUR BLACK NOTEBOOK?
ALAN EISENMAN: I'M SORRY, WHAT IS THE NUMBER?
MR. DOWNEY: 2470.
(DISCUSSION AMONGST COUNSEL OFF THE RECORD.)
MR. DOWNEY: YOUR HONOR, MAY I APPROACH THE WITNESS?
JUDGE DAVILA: YES.
MR. DOWNEY: (HANDING.) YOUR HONOR, LET ME SAY BEFORE I HAVE A DISCUSSION WITH THIS WITNESS ABOUT THIS DOCUMENT, THAT THERE WAS A PORTION OF THIS DOCUMENT THAT WAS DIRECTED TO BE REDACTED. I BELIEVE IN ONE VERSION OF THIS, ONE PHRASE OR TWO PHRASES WERE REDACTED THAT WERE BEYOND THE SCOPE OF THE COURT'S DIRECTION, AND WE'LL FIX THAT IN THE PUBLIC EXHIBIT.
JUDGE DAVILA: THANK YOU. DO YOU HAVE THIS, MR. BOSTIC?
MR. BOSTIC: I DO, YOUR HONOR. MY REQUEST WOULD BE THAT THE REDACTION SCOPE ISSUE BE FIXED IN THE VERSIONS PUBLISHED TO THE JURY.
JUDGE DAVILA: I THINK THAT'S YOUR INTENT, ISN'T IT?
MR. DOWNEY: YEAH, I THINK THAT CAN BE ACCOMPLISHED. CAN IT?
JUDGE DAVILA: YES, LET ME GIVE YOU A MINUTE TO SPEAK WITH YOUR PERSON.
(PAUSE IN PROCEEDINGS.) (DISCUSSION AMONGST DEFENSE COUNSEL AND I.T. OFF THE RECORD.)
MR. DOWNEY: OKAY. YOUR HONOR, TO AVOID DELAY, WHY DON'T WE COME BACK TO THIS SO I DON'T TIE UP --
JUDGE DAVILA: WE'LL PASS THIS FOR A MOMENT?
MR. DOWNEY: YES, WE'LL PASS THIS, AND WE'LL GET A REDACTED VERSION THAT THE JURY IS IN A POSITION TO SEE CONSISTENT WITH THE COURT'S ORDER.
MR. DOWNEY: LET ME SHOW YOU ANOTHER EMAIL ON THIS SAME SUBJECT, WHICH I BELIEVE SHOULD BE IN YOUR NOTEBOOK. WELL, WITHOUT SHOWING YOU THE EXHIBIT, LET ME JUST ASK YOU, YOU REMEMBER REACHING OUT TO SENATOR FRIST, DO YOU?
ALAN EISENMAN: YES, I DO.
MR. DOWNEY: AND YOU ASKED HIM QUESTIONS ABOUT THERANOS; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND ULTIMATELY HE STOPPED COMMUNICATING WITH YOU ABOUT THERANOS AS WELL; CORRECT?
ALAN EISENMAN: CAN I SAY THAT MY TALKING TO SENATOR FRIST WAS TOTALLY APPROPRIATE.
MR. DOWNEY: WELL, LET ME ASK YOU ABOUT MY QUESTION FIRST. YOU REACHED OUT TO SENATOR FRIST AND COMMUNICATED ABOUT THERANOS; CORRECT?
ALAN EISENMAN: I REACHED OUT TO A DIRECTOR OF A COMPANY THAT I HAVE A SUBSTANTIAL INVESTMENT IN, THAT I WAS SHUT OUT OF INFORMATION FOR AN EXTENDED PERIOD OF TIME.
MR. DOWNEY: SO IS IT YES THAT YOU DID REACH OUT?
ALAN EISENMAN: AND IT WAS A POINT WHERE I MIGHT HAVE HAD AN OPPORTUNITY TO SELL SOME OF MY INVESTMENT.
JUDGE DAVILA: MR. EISENMAN, MR. EISENMAN, FOR THE EFFICIENCY OF THIS, TRY TO LISTEN TO HIS QUESTION AND ANSWER HIS QUESTION, PLEASE.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: WHY DON'T YOU ASK YOUR QUESTION AGAIN.
BY MR. DOWNEY:
MR. DOWNEY: YOU REACHED OUT TO DISCUSS THERANOS WITH SENATOR FRIST; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU TOLD HIM THAT YOU WERE DOING THIS, BUT YOU DID NOT WANT YOUR FATHER-IN-LAW TO KNOW THAT YOU WERE DOING IT; CORRECT?
ALAN EISENMAN: THAT'S CORRECT, BUT THERE ARE REASONS THAT YOU'RE IMPLYING THAT I DON'T THINK ARE CORRECT.
MR. DOWNEY: I HAVEN'T IMPLIED ANYTHING. I JUST ASKED YOU ABOUT --
ALAN EISENMAN: OKAY. I'M PUTTING THAT OUT.
MR. DOWNEY: AND AT THE TIME YOUR FATHER-IN-LAW, YOUR FATHER-IN-LAW WAS ALSO, THROUGH HIS FAMILY OFFICE, AN INVESTOR IN THERANOS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, THIS PATTERN OF SENDING EMAILS AFTER YOU'VE BEEN INFORMED THAT YOU'RE NOT GOING TO GET THE INFORMATION OR IT'S NOT APPROPRIATE FOR YOU TO GET THE INFORMATION, THAT'S SOMETHING THAT YOU ENGAGE IN FREQUENTLY; IS THAT CORRECT?
ALAN EISENMAN: I TAKE EXCEPTION. IT WAS TOTALLY APPROPRIATE FOR ME TO GET THE INFORMATION AT THE TIME. I WAS CONTEMPLATING SELLING SOME OF MY INVESTMENT.
MR. DOWNEY: WELL, LET'S TALK ABOUT SOME OF THE EVENTS THAT HAVE HAPPENED SINCE YOU LEFT THE STAND ON WEDNESDAY. ON WEDNESDAY YOU LEFT THE STAND AFTER TESTIFYING ON DIRECT EXAMINATION; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN YOU APPROACHED THE GOVERNMENT AND YOU ASKED THEM ABOUT WHETHER YOU COULD RETURN TRAVEL TO HOUSTON THAT NIGHT; RIGHT?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. WOULD YOU RECALL SPEAKING TO THEM AFTER YOU LEFT THE STAND?
ALAN EISENMAN: I DON'T RECALL. MY HEAD WAS -- I WAS PRETTY TIRED.
MR. DOWNEY: OKAY. DO YOU RECALL THAT THEY TOLD YOU THAT THEY COULD TELL YOU, YOU WERE PERMITTED TO RETURN TO HOUSTON, BUT THAT THEY COULD NOT DISCUSS ANY SUBSTANCE ABOUT THE TESTIMONY WITH YOU? DO YOU RECALL THAT THEY TOLD YOU THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: THEY TOLD YOU NOT TO COMMUNICATE WITH ANY OF THE LAWYERS; CORRECT?
ALAN EISENMAN: I DIDN'T RECALL AT THE TIME. AS I MENTIONED, I WAS PRETTY TIRED WHEN I LEFT THE STAND.
MR. DOWNEY: OKAY. SO YOU'RE SAYING THAT YOU DON'T RECALL MR. SCHENK OR MR. BOSTIC OR MR. LEACH TELLING YOU DO NOT COMMUNICATE WITH US ABOUT THE SUBSTANCE OF YOUR TESTIMONY?
ALAN EISENMAN: I DO RECALL NOW.
MR. DOWNEY: OKAY. AND YOU UNDERSTOOD WHEN THEY COMMUNICATED THAT TO YOU THAT THAT'S IMPORTANT; RIGHT? THAT RELATES TO THE INTEGRITY OF THIS TRIAL; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU THEN RETURNED TO HOUSTON; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND HOW LONG DID IT TAKE YOU TO VIOLATE THE DIRECTION THAT HAD BEEN GIVEN TO YOU BY MR. SCHENK, AND MR. BOSTIC, AND MR. LEACH? HOW LONG?
ALAN EISENMAN: I DON'T RECALL. NOT, NOT --
MR. DOWNEY: WAS IT LESS THAN ABOUT 15 HOURS?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: WELL, DIDN'T YOU EMAIL REPRESENTATIVES OF THE PROSECUTION TEAM THE NEXT MORNING AFTER YOU RETURNED TO HOUSTON TO DISCUSS THE SUBSTANCE OF YOUR TESTIMONY?
ALAN EISENMAN: I RECALL AN EMAIL, BUT I DON'T RECALL THE TIMELINE.
MR. DOWNEY: OKAY. WELL, LET'S LOOK AT EXHIBIT 14223. I'M SORRY, 14233.
ALAN EISENMAN: I DON'T HAVE THAT EXHIBIT.
JUDGE DAVILA: IT MIGHT NOT BE IN THE BINDER.
MR. DOWNEY: IT PROBABLY IS NOT. THANK YOU, YOUR HONOR.
(PAUSE IN PROCEEDINGS.)
MR. DOWNEY: YOUR HONOR, I'VE PASS THE UP EXHIBIT 14233. THERE ARE -- I'VE PASSED UP BOTH AN UNREDACTED AND A REDACTED VERSION. IT'S MY INTENTION TO INTRODUCE ONLY THE REDACTED PORTION OF THE EMAIL.
JUDGE DAVILA: ALL RIGHT. DOES THE GOVERNMENT HAVE THIS? YOU HAVE THIS, MR. BOSTIC?
MR. BOSTIC: I DO, YOUR HONOR.
MR. DOWNEY: MAY I APPROACH THE WITNESS?
JUDGE DAVILA: YES.
BY MR. DOWNEY:
MR. DOWNEY: (HANDING.) AND EXHIBIT 14233 IS AN EMAIL THAT YOU SENT TO AGENT HERNANDEZ, IS IT NOT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THAT'S AGENT HERNANDEZ WHO IS SITTING RIGHT HERE AT COUNSEL TABLE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND DESPITE THE FACT THAT YOU HAD BEEN TOLD NOT TO COMMUNICATE WITH THE PROSECUTION TEAM ABOUT SUBSTANCE, YOU SENT HER AN EMAIL WHICH DID JUST THAT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THAT EMAIL, WHICH I'LL INTRODUCE THE REDACTED VERSION OF, WHICH IS 14233, I MOVE TO ADMIT.
MR. BOSTIC: YOUR HONOR, I'D OBJECT TO THE REDACTIONS. I'M NOT SURE WHAT THE PURPOSE IS OF ADMITTING THE EXHIBIT WITH 90 PERCENT REDACTED.
MR. DOWNEY: FAIR ENOUGH. YOU KNOW, YOUR HONOR, I'LL WITHDRAW THE REQUEST TO ADMIT IT.
MR. DOWNEY: YOU ACKNOWLEDGE THAT YOU SENT AN EMAIL THE NEXT DAY AFTER YOUR TESTIMONY; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU SENT IT TO AGENT HERNANDEZ; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU OFFERED SOME REFLECTIONS ON THE TESTIMONY THAT YOU HAD GIVEN THE DAY BEFORE?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU DID THAT BECAUSE YOU WANTED TO GET SOME FEEDBACK AND GUIDANCE AS TO HOW PEOPLE THOUGHT YOUR TESTIMONY WAS GOING; RIGHT?
ALAN EISENMAN: INCORRECT.
MR. DOWNEY: OKAY. NOW, THE GOVERNMENT REACTED TO THE FACT THAT YOU HAD SENT THIS, THIS COMMUNICATION TO THEM, FORWARDING INFORMATION AND DISCUSSING YOUR TESTIMONY, THEY CALLED YOU; CORRECT?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: AGENT HERNANDEZ CALLED YOU ON THE TELEPHONE. YOU DON'T RECALL?
ALAN EISENMAN: YES.
MR. DOWNEY: THIS WAS JUST LAST THURSDAY; RIGHT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND AGENT HERNANDEZ TOLD YOU DO NOT COMMUNICATE WITH THE GOVERNMENT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: SHE SAID DO NOT CALL US; CORRECT?
ALAN EISENMAN: I DON'T RECALL WHAT SHE SAID, BUT THE GIST WAS WE CAN'T COMMUNICATE.
MR. DOWNEY: RIGHT. AND SHE SAID THAT SPECIFICALLY MEANS DO NOT CALL US; RIGHT?
ALAN EISENMAN: COMMUNICATE, YES, IS A CALL, YES.
MR. DOWNEY: AND DO NOT TEXT US; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO NOT EMAIL US; CORRECT?
ALAN EISENMAN: I DON'T RECALL HER EXACT WORDS, BUT THE COMMUNICATION, AS I SAID, WAS WE CANNOT TALK.
MR. DOWNEY: RIGHT.
ALAN EISENMAN: AND WE CANNOT COMMUNICATE.
MR. DOWNEY: AND YOU LEFT THAT -- WELL, IT WASN'T JUST TALK; RIGHT? IT WAS DON'T SEND US AN EMAIL, DON'T TEXT US, DON'T SEND A CARRIER PIGEON. YOU CANNOT COMMUNICATE WITH US; RIGHT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND SO YOU LEFT THAT CALL UNDERSTANDING THAT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: HOW LONG DID IT TAKE FROM THAT CALL UNTIL THE NEXT TIME THAT YOU EMAILED THE GOVERNMENT?
ALAN EISENMAN: THERE WERE NO FURTHER EMAILS WITH ANYTHING SUBSTANTIVE.
MR. DOWNEY: HOW LONG DID IT TAKE UNTIL YOU EMAILED THE GOVERNMENT AFTER THAT CALL?
ALAN EISENMAN: MY RECOLLECTION IS THAT THERE'S AN EMAIL ABOUT TRAVEL ARRANGEMENTS.
MR. DOWNEY: OKAY. HOW LONG WAS THE EMAIL THAT YOU RECALL SENT TO THE GOVERNMENT AFTER THE, THE COMMUNICATION FROM AGENT HERNANDEZ NOT TO TALK TO THE GOVERNMENT?
ALAN EISENMAN: ARE YOU REFERRING TO MY ATTEMPTED COMMUNICATION ABOUT TRAVEL ARRANGEMENTS?
MR. DOWNEY: I'M ASKING YOU HOW LONG IT WAS.
ALAN EISENMAN: I DON'T KNOW. YOU'LL HAVE TO SHOW ME THE EXHIBIT.
JUDGE DAVILA: EXCUSE ME, EXCUSE ME. ONE AT A TIME, PLEASE.
ALAN EISENMAN: I DON'T KNOW.
MR. DOWNEY: I'M JUST --
JUDGE DAVILA: THAT WAS HIS ANSWER, "I DON'T KNOW."
BY MR. DOWNEY:
MR. DOWNEY: YOU DON'T KNOW HOW LONG IT WAS AFTER YOU SENT AN EMAIL AFTER THAT COMMUNICATION; RIGHT?
ALAN EISENMAN: I DON'T KNOW.
MR. DOWNEY: WAS IT YOUR UNDERSTANDING THAT THE NEXT MORNING YOU SENT THE GOVERNMENT AN EMAIL AGAIN?
ALAN EISENMAN: YOU'RE GOING TO HAVE TO SHOW ME THE EXHIBIT. I DON'T KNOW.
MR. DOWNEY: OKAY. MAY I APPROACH THE WITNESS, YOUR HONOR?
JUDGE DAVILA: YES.
BY MR. DOWNEY:
MR. DOWNEY: (HANDING.) DOES WHAT I'VE SHOWN YOU, WHICH IS EXHIBIT 14234, DOES THAT REFRESH YOUR RECOLLECTION AS TO HOW LONG IT TOOK YOU TO EMAIL THE GOVERNMENT AFTER AGENT HERNANDEZ HAD TOLD YOU NOT TO EMAIL THE GOVERNMENT?
ALAN EISENMAN: AS I MENTIONED EARLIER, THIS EMAIL HAS NOTHING TO DO WITH THE CASE.
MR. DOWNEY: WELL, DID THE GOVERNMENT VIEW IT THAT WAY?
ALAN EISENMAN: I DON'T KNOW.
MR. DOWNEY: WELL, THE GOVERNMENT CALLED YOU AFTER GETTING THIS COMMUNICATION; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THIS TIME IT WASN'T JUST AGENT HERNANDEZ; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: MR. BOSTIC, THE LAWYER FOR THE GOVERNMENT, CALLED YOU AS WELL; RIGHT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEY TOLD YOU DO NOT COMMUNICATE WITH US AGAIN; RIGHT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THAT WAS THE THIRD TIME THAT THE GOVERNMENT HAD TOLD YOU DO NOT COMMUNICATE WITH US ABOUT THE TESTIMONY THAT IS ONGOING IN JUDGE DAVILA'S COURT; RIGHT?
ALAN EISENMAN: THIS COMMUNICATION HAS NOTHING TO DO WITH THE TESTIMONY OR THE CASE.
MR. DOWNEY: IS IT UP TO YOU WHAT STUFF HAS TO DO WITH WHAT?
ALAN EISENMAN: I'M A SMART GUY. THIS HAS NOTHING TO DO WITH THE CASE.
MR. DOWNEY: DID THEY AGREE WITH YOUR SMART JUDGMENT?
MR. BOSTIC: OBJECTION.
ALAN EISENMAN: I DID THIS ON MY OWN VOLITION.
JUDGE DAVILA: EXCUSE ME, SIR. THERE'S AN OBJECTION.
MR. BOSTIC: CALLS FOR SPECULATION. LACKS FOUNDATION.
JUDGE DAVILA: OVERRULED. OVERRULED. BUT I WANT YOU TO ASK ANOTHER QUESTION, PLEASE.
MR. DOWNEY: SURE. SURE. ALL RIGHT.
MR. DOWNEY: NOW, SIMILARLY, OVER THE WEEKEND YOU GOT A SUBPOENA FROM THE DEFENSE, FROM OUR TEAM; RIGHT?
ALAN EISENMAN: I DID.
MR. DOWNEY: AND WE ASKED YOU TO BRING TO COURT TODAY THE ORIGINALS OF EXHIBIT 14, WHICH ARE THE NOTES THAT MR. BOSTIC HAD USED TO REFRESH YOUR TESTIMONY, REFRESH YOUR RECOLLECTION WHEN YOU WERE TESTIFYING ON YOUR DIRECT TESTIMONY. DO YOU RECALL THAT?
ALAN EISENMAN: I DO.
MR. DOWNEY: DID YOU BRING THE ORIGINALS OF THOSE NOTES?
ALAN EISENMAN: I DID.
MR. DOWNEY: OKAY. WILL YOU AT THE BREAK PASS THOSE NOTES TO THE COURTROOM DEPUTY SO THAT WE MIGHT HAVE A CHANCE TO INSPECT THEM?
ALAN EISENMAN: IT IS MY ONLY COPY OF MY HANDWRITTEN NOTES. I WOULD PREFER NOT TO RELEASE THEM. I HAVE NOT HAD AN OPPORTUNITY TO TALK TO EITHER THE PROSECUTION OR THE JUDGE, WHETHER THAT'S APPROPRIATE, WHAT I'M REQUIRED OR REQUESTED TO DO.
MR. DOWNEY: WELL, I GUARANTEE YOU SHE'S A RELIABLE PERSON TO PASS THE DOCUMENT TO. ARE YOU GOING TO COMPLY WITH THAT SUBPOENA?
ALAN EISENMAN: I DON'T UNDERSTAND THE PROCESS. IF I PASS THEM TO HER, DO I GET THESE NOTES BACK? DO THEY MAKE COPIES? I'D LIKE TO KNOW THE PROCESS.
MR. DOWNEY: ALL RIGHT. LET'S GO BACK TO TALKING ABOUT THE COMMUNICATIONS THAT YOU HAD WITH THERANOS AND TO THE SECOND INVESTMENT THAT YOU MADE IN THERANOS IN 2013, OKAY?
ALAN EISENMAN: OKAY.
MR. DOWNEY: NOW, IT'S, IT'S FAIR TO SAY THAT YOU HAD A HIGH DEGREE OF FRUSTRATION WITH THERANOS'S LEVEL OF COMMUNICATION WITH YOU IN THE PERIOD BETWEEN 2010 AND 2013; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOU HAD COMMUNICATED WITH -- YOU HAD SENT EMAILS COMPLAINING ABOUT IT TO TWO MEMBERS OF MANAGEMENT; CORRECT?
ALAN EISENMAN: I'M SORRY, WHO WERE THE TWO MEMBERS OF MANAGEMENT?
MR. DOWNEY: WELL, I WAS THINKING OF MS. HOLMES AND MR. BALWANI. CORRECT?
ALAN EISENMAN: I DON'T KNOW IF THEY WERE CRITICISMS, BUT THEY WERE REQUESTS FOR INFORMATION.
MR. DOWNEY: IN FACT, NOW THAT I THINK ABOUT IT, YOU SENT IT TO SEVERAL OTHER PEOPLE AT THERANOS AS WELL; CORRECT?
ALAN EISENMAN: NOT TO MY RECOLLECTION.
MR. DOWNEY: OKAY. AND YOU HAD TRIED TO COMMUNICATE WITH -- SENT COMMUNICATIONS TO MR. LUCAS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU SENT COMMUNICATIONS TO SENATOR FRIST; CORRECT?
ALAN EISENMAN: I DO RECALL ONE OTHER PERSON AT THERANOS THAT I HAD CONSTANT COMMUNICATION WITH, DANISE YAM, BECAUSE I WAS TRYING TO CONVERT A STOCK CERTIFICATE INTO A DIFFERENT FAMILY NAME, AND IT TOOK WELL OVER A YEAR AND MULTIPLE COMMUNICATIONS JUST TO DO A SIMPLE TRANSACTION, WHICH ALSO RAISED A RED FLAG, WHY CAN'T THEY TRANSFER A STOCK CERTIFICATE? WHY DOES IT TAKE MULTIPLE EMAILS AND A PERIOD OF WELL OVER A YEAR TO TRANSFER A STOCK CERTIFICATE?
MR. DOWNEY: AND DID YOU GET THAT STOCK CERTIFICATE FROM MS. YAM AND COMPLETE THAT TRANSACTION?
ALAN EISENMAN: EVENTUALLY. I DON'T KNOW IF IT WAS DANISE OR SOMEONE ELSE BECAUSE IT WAS KIND OF A REVOLVING DOOR OF PERSONNEL AT THERANOS, BUT MY RECOLLECTION IS THAT I DID GET IT AND IT WAS WELL OVER A YEAR AFTER I MADE THE REQUEST.
MR. DOWNEY: WELL, DANISE YAM WORKED AT THERANOS FOR ABOUT 13 YEARS, DIDN'T SHE?
ALAN EISENMAN: I DON'T KNOW.
MR. DOWNEY: AND YOU COMMUNICATED WITH HER THROUGHOUT THAT PERIOD, DIDN'T YOU?
ALAN EISENMAN: MY ONLY COMMUNICATION WAS ABOUT THE STOCK CERTIFICATES. SO THERE WERE MULTIPLE COMMUNICATIONS WHERE THERE SHOULD HAVE BEEN ONE.
MR. DOWNEY: OKAY. BUT WHATEVER THE NUMBER OF COMMUNICATIONS WAS, YOU WERE VERY FRUSTRATED WITH DEALING WITH THERANOS; IS THAT FAIR TO SAY?
ALAN EISENMAN: THAT'S FAIR TO SAY.
MR. DOWNEY: OKAY. AND THEN IN DECEMBER OF 2013, LO AND BEHOLD, ANOTHER OPPORTUNITY AROSE FOR YOU TO INVEST IN THERANOS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, DO YOU ACKNOWLEDGE THAT IN CONNECTION WITH THAT 2013 INVESTMENT, YOU NEVER SPOKE TO MS. HOLMES? IS THAT FAIR?
ALAN EISENMAN: THERE WERE SOME CONVERSATIONS BEFORE WE MADE THE 2013 INVESTMENT RATIFYING THAT THE TECHNOLOGY WORKED AND THIS WAS GROWTH CAPITAL. THE RISK HAD BEEN TAKEN OUT OF THE COMPANY.
MR. DOWNEY: YOU DID NOT SPEAK TO MS. HOLMES BEFORE YOU MADE YOUR 2013 INVESTMENT IN THERANOS. IS THAT TRUE OR FALSE?
ALAN EISENMAN: MY RECOLLECTION IS I TALKED TO SUNNY BALWANI. I'D HAVE TO REVIEW MY NOTES. I DON'T RECALL IF I TALKED TO ELIZABETH.
MR. DOWNEY: OKAY. YOU DON'T RECALL, AS YOU SIT HERE TODAY, SPEAKING TO MS. HOLMES ABOUT YOUR 2013 INVESTMENT; RIGHT?
ALAN EISENMAN: THAT'S CORRECT.
MR. DOWNEY: OKAY. YOU DO RECALL SPEAKING TO MR. BALWANI; CORRECT?
ALAN EISENMAN: YES, I DO.
MR. DOWNEY: AND YOU KNOW THAT AT SOME POINT AFTER THE SERIES OF 2010 EXCHANGES WITH MS. HOLMES THAT SHE ACTUALLY HAD CEASED COMMUNICATING WITH YOU DIRECTLY; CORRECT?
ALAN EISENMAN: I DON'T RECALL WHEN THE COMMUNICATIONS CEASED.
MR. DOWNEY: OKAY. BUT YOU RECALL THAT THEY CEASED AT SOME POINT?
ALAN EISENMAN: IT'S A LITTLE CONFUSING BECAUSE THERE WERE SOME COMMUNICATIONS AFTER 2013. THERE WERE SOME CALLS AND SOME COMMUNICATIONS.
MR. DOWNEY: YOU CAN'T PRECISELY DATE WHEN SHE --
ALAN EISENMAN: NO, I CANNOT.
MR. DOWNEY: OKAY. NOW, I THINK YOU TESTIFIED DURING YOUR DIRECT EXAMINATION THAT MR. BALWANI PROVIDED YOU SOME COMMUNICATIONS WHEN HE SPOKE TO YOU THAT ENCOURAGED YOU TO INVEST IN THERANOS IN 2013. IS THAT FAIR TO SAY, OR IS --
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. BUT IS IT ALSO FAIR TO SAY THAT DURING -- WELL, LET ME ASK YOU, WAS -- THE COMMUNICATION WITH MR. BALWANI WAS ON THE TELEPHONE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: DID YOU HAVE ANY PERSON-TO-PERSON MEETING WITH MR. BALWANI IN THAT WINDOW?
MR. DOWNEY: OKAY. AND IS IT FAIR TO SAY THAT YOU HAD A COUPLE CALLS WITH HIM?
ALAN EISENMAN: I DON'T RECALL THE NUMBER OF CALLS.
MR. DOWNEY: OKAY. BUT IN ANY EVENT, WHATEVER THE NUMBER OF CALLS WAS, HE DID NOT DURING THOSE CALLS DESCRIBE THERANOS'S ACTIVITIES AT ALL, DID HE?
ALAN EISENMAN: HE CONFIRMED THAT THE TECHNOLOGY WORKED BECAUSE THAT'S THE QUESTION THAT I ASKED.
MR. DOWNEY: HE DID NOT DESCRIBE THERANOS'S ACTIVITIES AT ALL DURING THAT CALL IN 2013 -- THOSE CALLS IN 2013?
ALAN EISENMAN: I DON'T UNDERSTAND WHAT YOU MEAN "DESCRIBE THERANOS'S ACTIVITIES AT ALL."
MR. DOWNEY: OKAY. WELL, DO YOU RECALL TELLING THAT TO AGENTS OF THE FBI IN 2018?
ALAN EISENMAN: DO YOU HAVE AN EXHIBIT THAT YOU CAN SHOW ME TO REFRESH MY RECOLLECTION?
MR. DOWNEY: I DO. WELL, I CAN TRY TO REFRESH YOUR RECOLLECTION.
(HANDING.) I THINK THIS IS, YOUR HONOR, IN OUR NOTEBOOKS.
JUDGE DAVILA: GREAT. OKAY.
MR. BOSTIC: I'M SORRY, YOUR HONOR. CAN I KNOW WHAT EXHIBIT NUMBER?
MR. DOWNEY: YES. IT'S 11014. IT SHOULD BE 11014. DO YOU HAVE THAT?
JUDGE DAVILA: IT'S IN THE BINDER.
MR. DOWNEY: DO YOU HAVE THAT?
MR. BOSTIC: YES.
BY MR. DOWNEY:
MR. DOWNEY: I DON'T WANT YOU TO DESCRIBE WHAT IT IS THAT YOU'RE LOOKING AT AT ALL.
ALAN EISENMAN: OKAY.
MR. DOWNEY: I'M JUST ASKING YOU -- I'D LIKE TO DIRECT YOUR ATTENTION TO PAGE 4 OF THE EXHIBIT AND TO REVIEW THE PARAGRAPH THAT BEGINS "BALWANI DID NOT." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: PAGE 4. DOES THAT REFRESH YOUR RECOLLECTION THAT MR. BALWANI DID NOT DESCRIBE THERANOS'S ACTIVITIES DURING HIS CALLS WITH YOU IN 2013?
(PAUSE IN PROCEEDINGS.)
ALAN EISENMAN: OKAY. WHAT IS THE QUESTION?
BY MR. DOWNEY:
MR. DOWNEY: DOES YOUR REVIEW OF EXHIBIT 11014 REFRESH YOUR RECOLLECTION THAT MR. BALWANI DID NOT DESCRIBE THERANOS'S ACTIVITIES DURING YOUR CALLS WITH HIM IN 2013?
ALAN EISENMAN: THE PLAIN READING OF THIS --
MR. DOWNEY: I DON'T WANT YOU TO DESCRIBE THE DOCUMENT. I -- THAT'S IMPORTANT THAT YOU NOT DO THAT.
ALAN EISENMAN: I'M NOT GOING TO DESCRIBE THE DOCUMENT. THE PLAIN READING OF THIS IMPLIES THAT I DID NOT DISCUSS THE MOST SUBSTANTIVE QUESTION WITH SUNNY AT THE TIME, AND I DON'T HAVE A CRYSTAL CLEAR RECOLLECTION, BUT KNOWING THE KIND OF INVESTOR I AM AND THE QUESTIONS I ASK, I MOST LIKELY ASKED HIM IF THE TECHNOLOGY WORKED.
MR. DOWNEY: WELL, I DON'T WANT TO YOU SPECULATE, MR. EISENMAN.
ALAN EISENMAN: I'M NOT GOING TO SPECULATE. BUT IT SAYS HERE THAT HE REFERRED ME TO, HE REFERRED ME --
JUDGE DAVILA: EXCUSE ME. YOU'RE NOT TO READ THE DOCUMENT.
ALAN EISENMAN: OH, OKAY.
JUDGE DAVILA: THIS IS JUST FOR YOUR RECOLLECTION.
MR. DOWNEY: OKAY.
MR. DOWNEY: LET ME TRY TO ASK A QUESTION AND GET REORIENTED HERE.
JUDGE DAVILA: LET'S RESET.
ALAN EISENMAN: ALL RIGHT.
JUDGE DAVILA: AND IT GOES BY QUESTION AND ANSWER.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: AND THE LAWYERS GET TO ASK THE QUESTIONS AND IT'S YOUR PRIVILEGE TO ANSWER THEM.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: SO, MR. DOWNEY, WHY DON'T YOU ASK YOUR QUESTION.
BY MR. DOWNEY:
MR. DOWNEY: OKAY. YOU UNDERSTAND I'VE PUT AN EXHIBIT IN FRONT OF YOU; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND ALL I WANT TO KNOW IN CONNECTION WITH THE EXHIBIT THAT I'M SHOWING YOU IS WHETHER IT REFRESHES YOUR RECOLLECTION OF A FACT THAT I AM STATING. OKAY? DO YOU UNDERSTAND THAT?
ALAN EISENMAN: WHAT'S THE FACT THAT YOU'RE STATING?
MR. DOWNEY: I HAVEN'T STATED IT YET.
ALAN EISENMAN: OH, OKAY.
MR. DOWNEY: I'M JUST DESCRIBING THE PROCESS SO THAT WE ENGAGE SENSIBLY IN A QUESTION AND ANSWER. OKAY?
ALAN EISENMAN: OKAY.
MR. DOWNEY: DON'T -- I'M NOT GOING TO ASK YOU WHAT THE DOCUMENT SAYS OR WHAT OTHER THINGS IT MAKES YOU REFLECT ON. OKAY? DOES EXHIBIT 11014 REFRESH YOUR RECOLLECTION THAT MR. BALWANI DID NOT DESCRIBE THERANOS'S ACTIVITIES DURING HIS CALLS WITH YOU REGARDING THE INVESTMENT IN 2013?
ALAN EISENMAN: NOT EXACTLY.
MR. DOWNEY: OKAY. IS IT TRUE THAT YOU DID NOT TRY TO ASK MR. BALWANI QUESTIONS ABOUT THERANOS DURING THAT CALL?
ALAN EISENMAN: PROBABLY NOT TRUE, BUT I DON'T HAVE A CRYSTAL RECOLLECTION.
MR. DOWNEY: OKAY. YOU DON'T HAVE A -- YOU DON'T RECALL RIGHT NOW ASKING HIM QUESTIONS --
ALAN EISENMAN: I JUST KNOW --
MR. DOWNEY: -- IN THAT CALL?
ALAN EISENMAN: I JUST KNOW FROM THE WAY THAT I CONDUCT MY BUSINESS, THAT BEFORE I MAKE AN INVESTMENT, I ASK THE PERTINENT QUESTIONS, AND THE PERTINENT QUESTION IS, DOES THE TECHNOLOGY WORK?
MR. DOWNEY: WELL, YOUR HONOR, I'M SORRY TO DO THIS, BUT I HAVE TO CONTINUE TO MOVE TO STRIKE ON THESE ANSWERS. I'M ASKING HIM IF HE RECALLS ASKING QUESTIONS.
MR. DOWNEY: DO YOU ACTUALLY RECALL THAT, OR DO YOU NOT KNOW ONE WAY OR THE OTHER?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. NOW, IS IT TRUE THAT AT THE TIME THAT YOU HAD THIS CONVERSATION WITH MR. BALWANI, YOUR RELATIONSHIP WITH HIM HAD BEEN VERY HOSTILE FOR A NUMBER OF YEARS? IS THAT FAIR?
ALAN EISENMAN: THAT'S FAIR.
MR. DOWNEY: YOU HAD FREQUENTLY SENT EMAILS OR CALLED THE COMPANY; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND HE HAD RESPONDED TO THOSE EMAILS, OR IN RESPONSE TO YOUR CALLS, SENT YOU EMAILS; CORRECT?
ALAN EISENMAN: HE HAD RESPONDED FICTITIOUSLY, SO HIS CREDIBILITY WAS LOW.
MR. DOWNEY: WELL, I'M JUST ASKING YOU IF HE RESPONDED. THAT'S ALL THE QUESTION THAT'S ON THE TABLE RIGHT NOW. HE RESPONDED --
ALAN EISENMAN: THE ONE ISSUE THAT HE RESPONDED TO WAS FICTITIOUS.
MR. DOWNEY: WELL, DID HE RESPOND OR DID HE NOT RESPOND?
ALAN EISENMAN: TO WHAT?
MR. DOWNEY: TO THE EMAILS THAT YOU WERE SENDING TO THE COMPANY.
ALAN EISENMAN: UM --
MR. DOWNEY: DID YOU SEND HIM AN EMAIL AND THEN HE HIT A REPLY AND SENT AN EMAIL BACK TO YOU?
ALAN EISENMAN: FOR THE MOST PART THEY WERE IGNORED OR HE THREATENED THAT THE NEXT EMAIL WOULD COME FROM COUNSEL.
MR. DOWNEY: EXACTLY. SO HE HAD EITHER IGNORED YOU; CORRECT?
ALAN EISENMAN: IGNORED OR INTIMIDATED ME.
MR. DOWNEY: OR HE WAS HOSTILE TOWARD YOU; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, YOU HAD GOTTEN THIS ANNOUNCEMENT FROM THERANOS THAT YOU COULD INVEST AGAIN WITH THIS COMPANY WHERE THE CHIEF OPERATING OFFICER WAS THREATENING YOU AND HOSTILE TO YOU. IS THAT FAIR TO SAY?
ALAN EISENMAN: I'M NOT INVESTING BASED ON A PERSON. I'M INVESTING BASED ON THE PROGRESS OF A COMPANY.
MR. DOWNEY: WELL, YOU WERE -- YOU WERE NEVERTHELESS -- WOULD YOU AGREE WITH ME THAT YOU HAD GOTTEN THIS COMMUNICATION OFFERING YOU THE OPPORTUNITY TO INVEST AGAIN? IS THAT FAIR? I THINK THAT'S A YES OR NO QUESTION.
ALAN EISENMAN: I WAS GIVEN THE OPPORTUNITY TO INVEST AGAIN, THAT'S CORRECT.
MR. DOWNEY: OKAY. AND YOU ENDED UP, IN CONNECTION WITH THAT INVESTMENT, SPEAKING WITH MR. BALWANI; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND DURING THAT CONVERSATION, WHAT MR. BALWANI DID TELL YOU IS, YOU KNOW, YOU CAN LOOK AT THE INFORMATION THAT IS AVAILABLE TO EVERYBODY ELSE; CORRECT?
ALAN EISENMAN: HE SAID LOOK AT THE -- YES, THE PUBLIC INFORMATION.
MR. DOWNEY: RIGHT. AND ALSO IN CONNECTION WITH OFFERING YOU THE OPPORTUNITY TO INVEST IN THERANOS, THEY ACTUALLY SENT A LONG COMMUNICATION TO YOU AND TO ALL OTHER SHAREHOLDERS WHO WERE BEING OFFERED THE SAME OPPORTUNITY TO INVEST; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU READ THAT COMMUNICATION PRESUMABLY; RIGHT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, DO YOU, DO YOU DENY THAT MR. BALWANI DISCOURAGED YOU FROM INVESTING AT THAT TIME?
ALAN EISENMAN: NO. HE WAS ENCOURAGING.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT EXHIBIT 12999.
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND I, I WOULD JUST ASK YOU, IS THIS A SERIES OF COMMUNICATIONS BETWEEN YOU AND MS. HOLMES WITH ONE OF THEM INVOLVING -- SORRY. A SERIES OF COMMUNICATIONS BETWEEN YOU AND MR. BALWANI THAT ARE THEN SEEMINGLY FORWARDED TO MS. HOLMES? IF YOU WOULD JUST LOOK AT THE TOP EMAIL AT THE BOTTOM -- THE TOP EMAIL ON THE TOP OF PAGE 1.
ALAN EISENMAN: OKAY.
MR. DOWNEY: DO YOU RECOGNIZE THESE AS DISCUSSING YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT EXHIBIT 12999.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 12999 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: IF YOU GO TO THE BOTTOM EMAIL ON PAGE 2, THERE'S AN EMAIL FROM YOU TO MS. HOLMES AND TO MR. BALWANI, AND YOU SAY TO THEM THAT "THIS IS THE SECOND GOOGLE ALERT I HAVE RECEIVED RECENTLY THAT CLAIMS THAT THERANOS COULD BECOME OBSOLETE. CAN WE HAVE A BRIEF CATCH UP CALL THIS WEEK? PLEASE DON'T IGNORE THIS REQUEST." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN ABOVE THAT MR. BALWANI RESPONDED; RIGHT? DO YOU SEE THAT, MR. BALWANI'S RESPONSE?
ALAN EISENMAN: YES.
MR. DOWNEY: AND HE TOLD YOU THAT HE THOUGHT THE EMAILS WERE BEYOND RIDICULOUS; RIGHT?
ALAN EISENMAN: RIGHT.
MR. DOWNEY: AND THAT THERANOS COULD BECOME OBSOLETE; CORRECT?
ALAN EISENMAN: JUST A POINT OF INFORMATION. THIS IS 2015 AND THE SECOND ROUND WAS 2013; CORRECT?
MR. DOWNEY: NO, NO. I UNDERSTAND THAT. WE'RE GOING TO GET TO THAT IN A MOMENT. BUT HE TOLD YOU IN THIS EMAIL THAT THERANOS COULD BECOME OBSOLETE; CORRECT?
ALAN EISENMAN: I JUST WANT TO MAKE SURE THAT I'VE GOT THE TIMELINE, BECAUSE THIS IS TWO YEARS AFTER WE MADE THE SECOND INVESTMENT AND THERE WAS ALL KINDS OF PUBLIC INFORMATION AND AN ACKNOWLEDGEMENT FROM THE COMPANY THAT THE TECHNOLOGY WORKED.
MR. DOWNEY: WELL, DO YOU RECALL THAT YOUR SECOND INVESTMENT, YOUR 2013 INVESTMENT WAS AT THE END OF 2013, IN DECEMBER OF 2013? DO YOU RECALL THAT FROM YOUR TESTIMONY?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU SEE THAT THIS EMAIL IS FROM JANUARY OF 2015; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: SO THIS IS ABOUT, YOU KNOW, A LITTLE OVER 12 MONTHS AFTER YOU'VE MADE THAT INVESTMENT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND IF YOU LOOK AT THE SECOND PARAGRAPH HERE, DO YOU SEE MR. BALWANI REFERRED BACK TO THE CONVERSATIONS THAT YOU HAD HAD IN CONNECTION WITH THAT INVESTMENT? DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND HE SAYS, "YOU CONTINUE TO BOMBARD US WITH EMAILS AND PHONE CALLS EVEN THOUGH JUST 12 SHORT MONTHS AGO I SPOKE WITH YOU IN DETAIL THAT YOU WILL NOT GET ANY UPDATES." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU RECALL HIM, AT THE END OF 2013, TELLING YOU YOU WOULD NOT GET ANY UPDATES BEFORE YOU MADE THE DECISION TO INVEST IN THERANOS?
ALAN EISENMAN: I DON'T RECALL HIM SAYING THAT I WOULD NOT GET ANY PROSPECTIVE UPDATES AFTER MY SECOND INVESTMENT.
MR. DOWNEY: OKAY. AND THEN HE GOES ON TO SAY THAT YOU SHOULDN'T INVEST. DO YOU SEE THAT?
ALAN EISENMAN: I THINK IT'S TOO LATE. WE ALREADY INVESTED. WE'RE NOT GOING TO INVEST AGAIN.
MR. DOWNEY: WELL, HE'S REFERRING BACK TO A CONVERSATION THAT HE HAD WITH YOU IN DECEMBER OF 2013. I'M ASKING IF YOU RECALL HIM TELLING YOU IN THAT DECEMBER 2013 CONVERSATION THAT YOU SHOULDN'T INVEST?
ALAN EISENMAN: CAN YOU SHOW ME AN EXHIBIT TO REFRESH MY MEMORY?
MR. DOWNEY: I AM SHOWING YOU AN EXHIBIT. I AM ASKING YOU IF WHAT HE TOLD YOU IN THIS EXHIBIT IS SOMETHING THAT YOU RECALL HAPPENING OR THAT YOU DON'T RECALL HAPPENING?
ALAN EISENMAN: WELL, THIS IS REFERRING TO SOMETHING IN 2013, AND UNLESS YOU SHOW ME AN EXHIBIT FROM 2013, I DON'T RECALL.
MR. DOWNEY: OKAY. AND THAT HE ALSO GOES ON TO SAY THAT HE TOLD YOU 12 SHORT MONTHS AGO THAT MANAGEMENT WOULD NOT BE SPENDING ANY TIME WITH YOU OR PROVIDING UPDATES OR RESPONDING TO EMAILS ABOUT OPERATION STRATEGY AND DETAILS. DO YOU SEE THAT?
ALAN EISENMAN: YEAH. THAT'S A LIE.
MR. DOWNEY: YOU DON'T RECALL HIM TELLING YOU THAT?
ALAN EISENMAN: NO, HE DID NOT TELL ME THAT.
MR. DOWNEY: OKAY.
ALAN EISENMAN: AND HE WOULDN'T TELL ME THAT. THAT'S RIDICULOUS. SORRY.
MR. DOWNEY: AND YOU SEE ABOVE AT THE VERY TOP OF 12999 THAT HE FORWARDED THIS EMAIL ON TO MS. HOLMES. DO YOU SEE THAT?
ALAN EISENMAN: I DO.
MR. DOWNEY: OKAY. AND JUST BELOW WHERE HE FORWARDED IT, HE SAID, "SUNNY, "IT WASN'T A FIRM COMMITMENT, ONLY A COURTESY." AND THEN YOU CONTINUE TO ASK FOR UPDATES AND SAY THAT YOU'VE BEEN PATIENT. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: DID YOU DISPUTE ANY OF THE OTHER THINGS THAT HE SAID IN THE EMAIL? DID YOU DISPUTE THAT HE TOLD YOU THAT YOU SHOULDN'T INVEST?
ALAN EISENMAN: AGAIN, YOU'RE GOING TO HAVE TO SHOW ME AN EXHIBIT THAT HE INDICATED THAT I SHOULDN'T INVEST. I DON'T RECALL.
MR. DOWNEY: WELL, LET'S FOCUS ON EXHIBIT 12999. THAT'S THE EXHIBIT THAT WE'RE LOOKING AT.
ALAN EISENMAN: THIS IS FROM 2015, AND YOU'RE ASKING ME ABOUT SOMETHING THAT HAPPENED IN 2013.
MR. DOWNEY: I'M ASKING YOU, MR. EISENMAN, IF IN THIS EMAIL YOU DISPUTED THE PRIOR EMAIL WHERE MR. BALWANI TOLD YOU THAT HE HAD DISCOURAGED YOU FROM INVESTING IN 2013?
ALAN EISENMAN: WELL, AGAIN, I DON'T RECALL HIM DISCOURAGING ME. IF YOU SHOW ME AN EXHIBIT, IT MIGHT REFRESH MY MEMORY.
MR. DOWNEY: IS THERE ANY RESPONSE IN THE EMAIL CHAIN WHERE HE MADE THAT STATEMENT TO YOU WHERE YOU SAY, THAT'S NOT TRUE, YOU DIDN'T DISCOURAGE ME FROM INVESTING, IN SUBSTANCE?
ALAN EISENMAN: I CAN'T ANSWER THE QUESTION BECAUSE YOU'RE ASKING ME SOMETHING THAT I DON'T RECALL UNLESS YOU SHOW ME AN EXHIBIT.
MR. DOWNEY: WELL, LOOK AT EXHIBIT 12999 AND SEE IF YOU SEE ANYTHING IN THERE WHERE YOU DISPUTE THAT MR. BALWANI --
ALAN EISENMAN: DO YOU WANT ME TO JUST LOOK AT THE MONITOR OR LOOK AT THE WHOLE CHAIN?
MR. DOWNEY: YOU CAN LOOK AT THE WHOLE CHAIN. WHATEVER YOU FEEL MORE COMFORTABLE WITH.
ALAN EISENMAN: OKAY. PLEASE REPEAT THE QUESTION.
MR. DOWNEY: DID YOU SEE ANYTHING IN EXHIBIT 12999 IN WHICH YOU DISPUTED MR. BALWANI'S STATEMENT THAT HE HAD DISCOURAGED YOU FROM INVESTING IN 2013?
ALAN EISENMAN: I DON'T SEE ANYTHING IN THIS EXHIBIT WHERE HE DISCOURAGES ME FROM INVESTING. CAN YOU POINT TO THE LANGUAGE?
MR. DOWNEY: AND IS IT FAIR TO SAY, MR. EISENMAN, THAT YOU DID NOT RESPOND TO OR DISPUTE AT ALL -- WHEN MR. BALWANI MADE THAT STATEMENT TO YOU, YOU DID NOT DISPUTE HIS STATEMENT THAT HE HAD DISCOURAGED YOU FROM INVESTING --
ALAN EISENMAN: CAN YOU SHOW ME THE STATEMENT WHERE HE DISCOURAGED ME FROM INVESTING? MAYBE I'M NOT SEEING IT. IS IT ON THIS EXHIBIT?
MR. DOWNEY: I THINK, MR. EISENMAN, I THINK YOU'RE HAVING TROUBLE FOLLOWING ME. LET ME SHOW YOU AGAIN THE EMAIL AT THE MIDDLE OF PAGE 2, WHICH IS AN EMAIL FROM MR. BALWANI TO YOU AT -- ON JANUARY 21ST AT 9:18 A.M. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: LET'S LOOK AT THE SECOND PARAGRAPH, WHICH WE LOOKED AT BEFORE, AND IN THE SECOND PARAGRAPH DO YOU SEE THAT MR. BALWANI BEGINS BY SAYING, "YOU CONTINUE TO BOMBARD US WITH EMAILS AND PHONE CALLS"? DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN HE GOES ON TO SAY, "EVEN THOUGH JUST 12 SHORT MONTHS AGO." DO YOU SEE THAT?
ALAN EISENMAN: YES, I DO. YEAH, THIS IS A DISCONNECT BECAUSE HE NEVER DISCOURAGED ME FROM INVESTING. THIS IMPLIES THAT HE DISCOURAGED ME, AND UNLESS YOU CAN SHOW ME SOMETHING FROM 2013 TO REFRESH MY RECOLLECTION, I DON'T HAVE ANY RECOLLECTION. I THINK HE WAS MOST ENCOURAGING AT THE TIME, NOT DISCOURAGING.
MR. DOWNEY: YOUR HONOR, I MOVE TO STRIKE EVERYTHING AFTER THE FIRST PHRASE, IF I MIGHT?
JUDGE DAVILA: GIVE ME JUST A MOMENT, PLEASE.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: THE QUESTION WAS, "AND THEN HE GOES ON TO SAY 'EVEN THOUGH JUST 12 MONTHS AGO.' DO YOU SEE THAT? "YES, I DO." EVERYTHING AFTER "YES, I DO" IS STRICKEN.
BY MR. DOWNEY:
MR. DOWNEY: LET ME TRY TO SET THE TABLE SO THAT YOU'RE NOT DEPRIVED OF SAYING SOMETHING THAT YOU WANT TO SAY. I UNDERSTAND THAT YOUR TESTIMONY TODAY IS THAT MR. BALWANI DID NOT DISCOURAGE YOU FROM INVESTING. RIGHT?
ALAN EISENMAN: IN 2013, NO, HE DID NOT DISCOURAGE ME.
MR. DOWNEY: OKAY. I'M ASKING YOU ABOUT WHAT HAPPENED DURING THE PERIOD WHEN YOU WERE AN INVESTOR IN THERANOS. OKAY?
ALAN EISENMAN: 2015?
MR. DOWNEY: YEAH.
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND IN 2015, MR. BALWANI SENT YOU THIS EMAIL; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND MY QUESTION TO YOU IS THAT, DID YOU RESPOND TO THIS EMAIL BY SAYING, THAT'S NOT TRUE, YOU DIDN'T DISCOURAGE ME FROM INVESTING?
ALAN EISENMAN: ARE YOU ASKING ME TO READ THE EXHIBIT AND THAT'S WHAT I RESPONDED?
MR. DOWNEY: I'M ASKING YOU IF YOU SEE ANY DISPUTE WITH MR. BALWANI'S CHARACTERIZATION OF WHAT HAPPENED.
ALAN EISENMAN: OH, YEAH, THIS IS A MISCHARACTERIZATION. THAT'S WHAT YOU'RE ASKING ME.
MR. DOWNEY: OKAY. AND YOU DID NOT DISPUTE IT AT THE TIME. IS THAT WHAT YOU'RE TRYING TO AVOID SAYING?
ALAN EISENMAN: I DID NOT DISPUTE WHAT?
MR. DOWNEY: YOU DID NOT DISPUTE IN THIS EMAIL IN 2015 THAT MR. BALWANI HAD DISCOURAGED YOU FROM INVESTING PRIOR TO THE TIME THAT YOU MADE YOUR INVESTMENT IN 2013?
ALAN EISENMAN: YEAH. TO REPEAT, HE DID NOT DISCOURAGE ME AT THE TIME OF THE INVESTMENT IN 2013. HE WAS MOST ENCOURAGING.
MR. DOWNEY: OKAY. OKAY. LET ME ASK YOU TO LOOK AT EXHIBIT 1371.
JUDGE DAVILA: MR. DOWNEY, I WONDER IF WE SHOULD TAKE OUR MORNING BREAK NOW BEFORE WE MOVE INTO ANOTHER EXHIBIT?
MR. DOWNEY: THAT'S FINE, YOUR HONOR.
JUDGE DAVILA: LET'S DO THAT. LADIES AND GENTLEMEN, LET'S TAKE OUR MORNING BREAK. IT WILL BE ABOUT 30 MINUTES. IT WILL BE ABOUT 30 MINUTES.
ALAN EISENMAN: WILL THERE BE A LATER BREAK FOR LUNCH, OR IS THIS AN OPPORTUNITY --
JUDGE DAVILA: WE'RE GOING TO END AT 1:00 O'CLOCK TODAY.
ALAN EISENMAN: OH, OKAY.
JUDGE DAVILA: ALL RIGHT. WE'LL BE IN RECESS. COUNSEL, PLEASE REMAIN FOR JUST A MOMENT.
(JURY OUT AT 10:36 A.M.)
JUDGE DAVILA: THANK YOU. PLEASE BE SEATED. THE RECORD SHOULD REFLECT THAT THE JURY HAS LEFT. MR. EISENMAN, YOU CAN LEAVE AS WELL.
MR. DOWNEY: YOUR HONOR, BEFORE MR. EISENMAN LEAVES, DO YOU WANT TO GIVE HIM ANY DIRECTION?
JUDGE DAVILA: I WANT TO TALK TO COUNSEL FIRST.
MR. DOWNEY: OKAY. THANK YOU.
JUDGE DAVILA: MR. EISENMAN, IF YOU WOULD LEAVE THE COURTROOM FOR JUST A MOMENT. IF YOU WOULD STAY OUTSIDE FOR JUST A MOMENT, I MAY WANT TO TALK TO YOU A LITTLE BIT.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: AND WE'LL CALL YOU BACK IN.
ALAN EISENMAN: THANK YOU.
JUDGE DAVILA: YOU'RE WELCOME. ALL RIGHT. ALL COUNSEL ARE PRESENT. OUR JURY HAS LEFT. THE WITNESS HAS LEFT THE COURTROOM. DO YOU WANT TO EXCUSE YOUR CLIENT FOR THIS DISCUSSION, OR DO YOU WANT TO TALK FOR JUST A MOMENT? WHATEVER YOU WOULD LIKE TO DO.
MR. DOWNEY: LET ME JUST -- MAY WE JUST SPEAK FOR ONE MOMENT, YOUR HONOR?
JUDGE DAVILA: YES. OF COURSE.
MR. DOWNEY: YOUR HONOR, WE'VE HAD THE OPPORTUNITY TO CONSULT AND THAT'S FINE.
JUDGE DAVILA: ALL RIGHT. THANK YOU. WITH COUNSEL'S CONSENT, MS. HOLMES HAS STEPPED OUT. ALL OTHER PARTIES ARE PRESENT. THIS IS REGARDING THE SUBPOENA ISSUE.
MR. DOWNEY: YES.
JUDGE DAVILA: AND IT SOUNDS LIKE YOU ISSUED A SUBPOENA, MR. DOWNEY. THE NOTES OF MR. EISENMAN APPARENTLY ARE HERE, HE HAS THEM, AND YOU WOULD LIKE THEM SUBMITTED TO THE COURT. TELL ME WHAT YOU WOULD LIKE TO HAVE.
MR. DOWNEY: YES, YOUR HONOR. THANK YOU. WHAT HE WAS SUBPOENAED FOR WAS AN ORIGINAL COPY OF THE NOTES THAT HE PROVIDED. THOSE EXHIBITS ARE -- A COPY OF THOSE NOTES IS ACTUALLY MARKED AS EXHIBIT 14, AND WE WOULD LIKE JUST THE OPPORTUNITY TO INSPECT THE ORIGINAL OF THE NOTES.
JUDGE DAVILA: OKAY. THANK YOU. MR. BOSTIC?
MR. BOSTIC: NO OBJECTION, YOUR HONOR. THE GOVERNMENT WOULD LIKE AN OPPORTUNITY TO INSPECT WHATEVER IS PROVIDED TO THE DEFENSE.
JUDGE DAVILA: HOW SHOULD WE -- LET'S TALK ABOUT THE PROTOCOL OF THAT THEN. I'M HAPPY TO LET YOU DO THAT. IS THIS THE TIME THAT YOU SHOULD DO THAT THEN DURING THIS BREAK?
MR. DOWNEY: I THINK IT WOULD PROBABLY BE BEST IN CASE WE FINISH WITH THIS WITNESS TODAY.
JUDGE DAVILA: RIGHT. OKAY. SO LET'S CALL HIM BACK. I'LL TELL HIM THAT, MR. EISENMAN, PARDON ME, THAT I'LL -- PURSUANT TO THE SUBPOENA, THAT IF HE COULD LODGE HIS NOTES WITH OUR COURTROOM DEPUTY -- AND THIS IS NOT FOR PHOTOCOPYING. THIS IS JUST FOR COUNSEL TO REVIEW; IS THAT CORRECT?
MR. DOWNEY: THAT'S CORRECT, YOUR HONOR. I THINK WE HAVE -- I THINK, UNLESS MR. BOSTIC AND I ARE BOTH MISTAKEN, I THINK WE HAVE A PHOTOCOPY.
MR. BOSTIC: THAT'S MY UNDERSTANDING.
JUDGE DAVILA: ALL RIGHT. WOULD YOU LIKE TO DO THAT HERE IN THE COURTROOM? WOULD YOU LIKE ME TO PROVIDE YOU A SPACE TO DO THAT WHERE THE TWO OF YOU CAN DO THAT PRIVATELY? MAYBE I CAN OFFER YOU OUR SMALL ANTE ROOM BEHIND HERE FOR THAT PURPOSE.
MR. DOWNEY: EITHER IS FINE, YOUR HONOR.
MR. BOSTIC: WHATEVER WORKS BEST.
JUDGE DAVILA: LET'S HAVE YOU DO IT THE BACK. I THINK THAT MIGHT BE MORE ADVANTAGEOUS. LET'S CALL MR. EISENMAN IN, PLEASE. ANYTHING FURTHER BEFORE HE COMES BACK IN?
MR. DOWNEY: NO, YOUR HONOR.
MR. BOSTIC: NO, YOUR HONOR.
JUDGE DAVILA: AND THEN THEY'LL BE RETURNED BACK TO HIM AFTER THE REVIEW.
MR. DOWNEY: IT DEPENDS ON WHAT WE SEE IN THE REVIEW. IF WE WANT TO RETAIN THEM OR HAVE FURTHER REVIEW BY AN EXPERT, WE'LL CERTAINLY APPRISE THE COURT.
JUDGE DAVILA: ALL RIGHT. THANK YOU FOR COMING BACK, MR. EISENMAN. I JUST WANT TO LET YOU KNOW, YOU DID BRING YOUR NOTES PURSUANT TO THE SUBPOENA. YOU HAVE A FOLDER IN YOUR HAND. THANK YOU FOR THAT. WHAT I'M GOING TO ASK YOU TO DO IS TO LODGE THEM WITH OUR COURTROOM DEPUTY NOW. LET ME TELL YOU WHAT IS GOING TO HAPPEN, SIR, WITH YOUR NOTES. I HAVE AGREED TO HAVE THE LAWYERS, BOTH SIDES, REVIEW THE NOTES, AND THEY'RE GOING TO STEP INTO AN ANTE ROOM BEHIND ME DURING OUR BREAK, AND THEY'RE JUST GOING TO REVIEW THOSE NOTES WITH WHAT THEY HAVE. MY ANTICIPATION IS THAT THE NOTES WILL BE RETURNED TO YOU. HOWEVER, I WILL HAVE FURTHER DISCUSSION WITH THE LAWYERS PRIOR TO THAT HAPPENING, AND I WILL INFORM YOU AS TO WHAT NEXT IS GOING TO HAPPEN WITH THE NOTES. ALL RIGHT, SIR? YOU HAVE THOSE WITH YOU?
ALAN EISENMAN: YES.
JUDGE DAVILA: GREAT. WHY DON'T YOU BRING THOSE FORWARD. YOU CAN HAND THEM TO OUR COURTROOM DEPUTY HERE. I APPRECIATE THAT. AND THERE'S A FOLDER.
ALAN EISENMAN: (HANDING.)
JUDGE DAVILA: THANK YOU, AND WE'LL BE ON A BREAK NOW.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: AND WE'LL LET YOU KNOW -- THIS MAY EXTEND LONGER THAN 30 MINUTES. I DON'T KNOW. BUT WE'LL CERTAINLY LET YOU KNOW WHEN YOU CAN COME BACK. THANK YOU, SIR.
ALAN EISENMAN: OKAY. THANK YOU.
JUDGE DAVILA: YOU'RE WELCOME. THE RECORD SHOULD REFLECT THAT THE WITNESS HAS LEFT THE COURTROOM. ANYTHING ELSE BEFORE WE BREAK, COUNSEL?
MR. BOSTIC: NO, YOUR HONOR.
MR. DOWNEY: NO, YOUR HONOR.
JUDGE DAVILA: ALL RIGHT. THANK YOU. THE NOTES ARE HERE. OUR COURTROOM DEPUTY, MS. DIBBLE, WILL ESCORT YOU TO THE ROOM BEHIND ME WHERE COUNSEL CAN REVIEW THOSE NOTES, AND THEN YOU CAN LET ME KNOW IF THERE'S ANYTHING ELSE WE NEED TO DO.
MR. BOSTIC: THANK YOU, YOUR HONOR.
MR. DOWNEY: THANK YOU, YOUR HONOR.
(RECESS FROM 10:41 A.M. UNTIL 11:21 A.M.)
JUDGE DAVILA: WE'RE BACK ON THE RECORD. ALL COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT. WE'RE OUTSIDE OF THE PRESENCE OF THE JURY AND THE WITNESS. COUNSEL, YOU'VE HAD AN OPPORTUNITY TO REVIEW THE NOTES?
MR. DOWNEY: WE DID, YOUR HONOR.
MR. BOSTIC: YES, YOUR HONOR.
JUDGE DAVILA: ANYTHING YOU WANT TO TALK ABOUT?
MR. DOWNEY: YES, THERE IS, YOUR HONOR. I WANTED TO ASK IF THE COURT WOULD DO ONE OF TWO THINGS. I GUESS I WOULD PREFER THE FIRST OPTION, BUT WE'LL TAKE THE SECOND OPTION. AS I SUSPECTED, THERE ARE SOME INDICATIONS IN THE NOTES THAT THE NOTES ARE NOT WHAT MR. EISENMAN DESCRIBED ON HIS DIRECT EXAMINATION AS BEING, YOU KNOW, CONTEMPORANEOUS NOTES OF CONVERSATIONS THAT HE HAD WITH MS. HOLMES. AT CERTAIN IMPORTANT PLACES IN THE NOTES, ADDITIONAL INFORMATION HAS BEEN INSERTED IN A DIFFERENT COLORED INK. FOR EXAMPLE, THERE'S ONE EXAMPLE, I THINK IT'S ON PAGE 7 OF THE EXHIBIT, WHERE THERE'S A LIST OF PHARMACEUTICAL COMPANIES THAT HAVE BEEN INSERTED IN BLUE INK WHEN THE REMAINDER OF THE DOCUMENT IS IN BLACK INK. NOW, ON DIRECT EXAMINATION, YOUR HONOR WILL RECALL THAT MR. EISENMAN TESTIFIED ABOUT HOW IMPORTANT INFORMATION WAS THAT MS. HOLMES WAS PROVIDING HIM ABOUT THE INVESTMENT, THE PARTNERSHIPS WITH PHARMACEUTICAL COMPANIES, ET CETERA.
AND IT DOES NOT APPEAR THAT IT WAS PART OF THE SAME -- DID NOT HAPPEN AT THE SAME TIME I WILL SAY AT LEAST, THAT A LISTING OF THOSE PHARMACEUTICAL COMPANIES IN THE NOTES WAS PUT IN THERE. I DON'T KNOW THE SIGNIFICANCE OF ANY OF THAT. I WOULD JUST LIKE AN OPPORTUNITY TO -- I'D ASK THE COURT, IN THE FIRST INSTANCE, TO JUST RETAIN THE NOTES SO THAT WE MIGHT HAVE AN OPPORTUNITY TO REVIEW THEM IN MORE DETAIL. OVER THE COURSE OF THE LAST 30 MINUTES OR SO, MR. BOSTIC AND I, I THINK, GOT THROUGH THE NOTES ONCE. SO I DON'T WANT TO SAY MORE THAN THAT AT THIS POINT. BUT I THINK SOME OF THE CONCERNS THAT I HAVE ABOUT THE INTEGRITY OF THE NOTES ARE CONFIRMED. THERE ALSO WAS LESS OF A FORENSIC ANALYSIS CONCERN, BUT THERE WAS JUST A PRESENTATIONAL CONCERN. THE NOTES WERE REORDERED IN THE PRODUCTION GIVEN TO THE GOVERNMENT SO THAT THE SECOND PAGE WAS MADE TO APPEAR TO BE THE FIRST PAGE. THAT WAS IMPORTANT, I THINK, TO MR.
EISENMAN'S PRESENTATION BECAUSE IT'S EVIDENT IN THE MIDDLE OF THE PAGE THAT HAD BEEN MOVED TO PAGE 1 THAT HE GETS MS. HOLMES'S TELEPHONE NUMBER. BUT ON THE ORIGINAL OF PAGE 1, WHICH I BELIEVE REFLECTS CONVERSATIONS WITH MANY OTHER INDIVIDUALS BEFORE HE EVER MET MS. HOLMES, THERE'S A GOOD DEAL OF INFORMATION. BY REORDERING THE NOTES, IT CONVEYED THAT THE INFORMATION WAS OBTAINED FROM MS. HOLMES RATHER THAN FROM OTHERS. SO IT -- THE NOTES CONCERN ME. WE HAVE THE JURY HERE FOR HALF A DAY TODAY, AND I'M VERY RELUCTANT TO, YOU KNOW, DELAY THIS FURTHER OR DISTURB IT. BUT I HAVE CONCERNS. I'D LIKE THE OPPORTUNITY TO REVIEW THE ORIGINAL FURTHER. I'M HAPPY TO STAY OUT OF THIS ISSUE FOR THE BALANCE OF TODAY, AND IF THERE IS ANY ISSUE THAT WE WANT TO ADDRESS AFTER WE REVIEW THE NOTES, TO RECALL MR. EISENMAN. BUT I WOULD LIKE THE OPPORTUNITY TO FORENSICALLY REVIEW THEM. ALTERNATIVELY, I'D LIKE TO -- THE OPPORTUNITY TO EXAMINE MR. EISENMAN OUTSIDE OF THE PRESENCE OF THE JURY TO UNDERSTAND WHAT THE EXPLANATION IS FOR SOME OF THE DISCREPANCIES, THE ORDERING, ET CETERA.
JUDGE DAVILA: AND WHAT WOULD YOUR -- THANK YOU. WHAT WOULD YOUR INTENT BE AFTER YOU VOIR DIRE THE WITNESS ON THE NOTES?
MR. DOWNEY: WELL, IT MAY BE -- LET ME SAY BEFORE I SAY ANY OF THIS, I BELIEVE THAT MR. BOSTIC RECEIVED THE SAME COPY OF THE NOTES THAT I RECEIVED. I DON'T HAVE ANY INFORMATION OR INDICATION THAT THE GOVERNMENT WAS PROVIDED WITH AN ORIGINAL SET OF THE NOTES. SO I JUST WANT TO BE CLEAR ABOUT THAT IN ADVANCE. NEVERTHELESS, THE NOTES WERE USED ON DIRECT EXAMINATION FOR PURPOSES OF REFRESHING THE WITNESS'S RECOLLECTION. AS YOUR HONOR KNOWS, HE WAS QUITE AGGRESSIVE, AND THE WITNESS WAS AGGRESSIVE IN TRYING TO READ HIS NOTES AND TO SUGGEST THAT REVIEWING THE NOTES WOULD REFLECT THE ACTUAL CONTENT OF CONVERSATIONS WITH MS. HOLMES. I DO NOT BELIEVE THAT IS TRUE. I THINK THAT TESTIMONY SHOULD -- LIKELY THE REMEDY IS TO STRIKE THAT TESTIMONY.
JUDGE DAVILA: ALL RIGHT. MR. BOSTIC?
MR. BOSTIC: SO, YOUR HONOR, I HAVE TO DISAGREE WITH COUNSEL'S CHARACTERIZATION OF WHAT THE ORIGINALS SHOW. I THINK THERE ARE A LOT OF ASSUMPTIONS AND JUMPING TO CONCLUSIONS BAKED INTO WHAT DEFENSE COUNSEL IS ALLEGING HERE, AND I JUST DON'T THINK THAT IT'S SUPPORTED BY THE EVIDENCE. THE ORIGINALS OF MR. EISENMAN'S NOTES DO SHOW IN A COUPLE OF LOCATIONS WHERE A SINGLE PAGE WILL CONTAIN TWO COLORS OF INK. COUNSEL REFERRED TO PAGE 7 OF THE EXHIBIT. I THINK HE MEANT TO REFER TO PAGE 13 OF THE EXHIBIT, WHICH IS A PAGE WHERE TWO COLORS OF INK APPEAR. MOST OF THE TEXT IS IN BLACK. A LIST OF PHARMACEUTICAL COMPANIES AND OTHER INFORMATION APPEAR IN BLUE. I UNDERSTAND COUNSEL IS READING INTO THAT SOME KIND OF NEFARIOUS INTENT TO DOCTOR THESE MATERIALS AFTER THEY WERE CREATED. I DON'T THINK THERE'S ANY REAL SHOWING THAT THAT'S WHAT HAS HAPPENED HERE.
I WASN'T HERE WHEN THESE NOTES WERE CREATED, SO I DON'T KNOW WHY THERE ARE TWO COLORS OF INK THERE, BUT I THINK IT'S NOT FAIR TO ASSUME THAT THERE IS SOMETHING DISHONEST HAPPENING AS A RESULT. THESE NOTES ARE NOT IN EVIDENCE. THEY WERE NOT ADMITTED. THE JURY IS NOT RELYING ON THE SUBSTANCE OR THE AUTHENTICITY OF THE NOTES IN THEIR REVIEW OF THE EVIDENCE IN THIS CASE. THE POINTS THAT COUNSEL HAS RAISED ALSO DID NOT FEATURE PROMINENTLY IN THE WITNESS'S TESTIMONY. FOR EXAMPLE, THE ORDERING OF PAGE 1 VERSUS PAGE 2 OF THE NOTES, WHETHER THE EXHIBIT HAS PAGE 1 AND 2 IN A DIFFERENT ORDER FROM HOW THE NOTES WERE ORIGINALLY PREPARED HAS NO RELEVANCE TO THE SUBSTANCE OF MR. EISENMAN'S TESTIMONY ON DIRECT OR ON CROSS. THE TESTIMONY REGARDING MS. HOLMES'S CELL PHONE NUMBER, WHICH APPEARS IN THE NOTES, AS I RECALL, IT WAS SIMPLY MR. EISENMAN TESTIFIED THAT IN THE EARLY DAYS OF THEIR CONVERSATIONS, HE HAD ACCESS TO MS. HOLMES AND THAT HE HAD BEEN PROVIDED HER CELL PHONE NUMBER. THERE'S NO TESTIMONY ABOUT EXACTLY WHEN THAT OCCURRED, AND I DON'T THINK THE JURY HAS BEEN ASKED TO MAKE ANY FINDINGS ON THAT, ESPECIALLY NOT AS A RESULT OF THE ORDERING OF PAGES AND NOTES. SO I DON'T HAVE ANY OBJECTION, OF COURSE, TO THE COURT RETAINING A COPY. I WOULD OBJECT TO CROSS-EXAMINING THE WITNESS IN FRONT OF THE JURY WITHOUT A MORE SUBSTANTIAL SHOWING THAT THERE'S A BASIS FOR THAT, AND I ALSO HAVE CONCERNS ABOUT COUNSEL'S SUGGESTION OF DELAYING THE PROGRESS OF THE TRIAL.
JUDGE DAVILA: WHAT ARE YOUR THOUGHTS ABOUT, MR. DOWNEY SAID THAT HE WOULD LIKE TO VOIR DIRE THE WITNESS ON HIS NOTES OUTSIDE OF THE PRESENCE OF THE JURY?
MR. BOSTIC: I DEFER TO THE COURT ON WHETHER THE COURT BELIEVES THAT THAT IS NECESSARY. I'M DOUBTFUL AS TO WHETHER A SUFFICIENT FOUNDATION HAS BEEN LAID EVEN TO WARRANT THAT STEP, BUT I'LL LEAVE THAT TO THE COURT.
JUDGE DAVILA: OKAY. MR. DOWNEY?
MR. DOWNEY: YOUR HONOR, LET ME BE CLEAR. I'M NOT ALLEGING ANYTHING. I'M JUST SEEING A SITUATION WHERE SOMETHING HAS BEEN IMPORTANT TO A WITNESS'S TESTIMONY, AND I THINK IT'S IMPORTANT TO UNDERSTAND SOME DISCREPANCIES. WHAT MAKES THAT IMPORTANT IS NOT THAT THE EXHIBIT HAS BEEN ADMITTED. IT HASN'T. MR. BOSTIC IS CORRECT IN THAT REGARD. WHAT MAKES IT IMPORTANT IS THAT FOR A SUBSTANTIAL PORTION OF HIS DIRECT, HE WAS LOOKING AT THE DOCUMENT IN QUESTION AND ESSENTIALLY TESTIFYING OUT OF A RECOLLECTION OF WHAT HE WAS SEEING WITHIN THAT DOCUMENT. THAT'S, THAT'S THE SIGNIFICANCE OF IT. I DON'T MIND THE OPTION OF VOIR DIRING HIM OUTSIDE OF THE JURY, BUT IT DOES SEEM TO ME THAT IF SOMEBODY WITH SOME EXPERTISE BEYOND WHAT EXPERTISE I HAVE WERE TO REVIEW THE NOTES, IT MIGHT ALLAY ANY CONCERNS THAT I HAVE AND IT MIGHT MAKE SUCH A PROCEEDING UNNECESSARY. AND BY THE SAME TOKEN, I MIGHT PROCEED INTO SUCH A HEARING WITHOUT A FULL UNDERSTANDING OF WHAT HAS OCCURRED WITH RESPECT TO THE NOTES. SO I'M NOT ASKING TO HAVE THIS EXAMINATION IN FRONT OF THE JURY. I AGREE WITH MR. BOSTIC AT THIS POINT AS TO THAT. BUT I DON'T WANT TO NOT ADDRESS THIS ISSUE AND DETERMINE WHAT THE APPROPRIATE REMEDY IS IN LIGHT OF THE GOVERNMENT'S SUBSTANTIAL RELIANCE ON GOVERNMENT'S 14 ON THE DIRECT.
JUDGE DAVILA: HOW WAS THAT RELIANCE? WHAT WAS RELIANCE?
MR. DOWNEY: YOUR HONOR, IF YOU LOOK AT -- I'M NOT SURE I CAN ARTICULATE IT TO A FULL EXTENT, BUT MR. EISENMAN WAS UNABLE TO RECALL OF HIS OWN MEMORY CERTAIN CONVERSATIONS THAT HE HAD HAD WITH MS. HOLMES. AND IF YOU LOOK IN THE EARLY PART OF HIS DIRECT ON TRYING TO IDENTIFY THE FIRST AMOUNT, THE FIRST PLACE THAT IT HAPPENS, IT -- HE'S SHOWN THIS DOCUMENT FOR PURPOSES OF REFRESHING HIS RECOLLECTION. HE'S REFERRED BOTH ON HIS DIRECT AND HE REFERRED TODAY TO, YOU KNOW, THE NOTES AS, YOU KNOW, A SUBJECT THAT, YOU KNOW, WHERE HE BELIEVES IF HE HAD THE NOTES, HE WOULD BE ABLE TO TESTIFY ACCURATELY. THE QUESTION IS, IS THAT AN ACCURATE SUPPOSITION ON HIS PART? ARE THESE NOTES ACCURATE? SO I THINK IF I -- I DON'T HAVE -- I'VE NOT GONE THROUGH, IN THE BRIEF TIME THAT WE'VE HAD, ALL OF THE INSTANCES IN WHICH HE WAS SHOWN EXHIBIT 14 IN HIS DIRECT, BUT IT WAS QUITE A FEW.
JUDGE DAVILA: SO -- ALL RIGHT. THANK YOU. SO IT SOUNDS LIKE WHAT YOU'RE SAYING IS THAT YOU THINK HE MAY HAVE ALTERED THE NOTES, THE INTEGRITY OF THE NOTES MAY HAVE BEEN DISTURBED FROM WHAT THE GOVERNMENT RECEIVED AND WHAT YOU RECEIVED?
MR. DOWNEY: I'M NOT AT THAT POINT YET, YOUR HONOR.
JUDGE DAVILA: SO WHAT IS THE -- I GUESS I'M TRYING TO CAPTURE, IF HE CHANGED HIS NOTES, WHAT DOES THAT SAY TO US?
MR. DOWNEY: WELL, HE'S TESTIFIED THAT THESE NOTES ARE NOTES OF CONTEMPORANEOUS CONVERSATION WITH THE DEFENDANT.
JUDGE DAVILA: SO WHEN HE COMES BACK, WE HAVE THE NOTES, HAVE YOU CHANGED THE NOTES AT ALL? AND HE SAYS YES OR NO, AND THEN YOU CAN FOLLOW UP WITH THAT. BUT IS THE REAL ISSUE HERE, HAS HE CHANGED, OR DOES HIS TESTIMONY -- WILL HIS TESTIMONY CHANGE BASED ON AN ALTERATION OF NOTES IF, IN FACT, THAT HAPPENED?
MR. DOWNEY: WELL, YOUR HONOR, I THINK THERE'S A WHOLE RANGE OF POSSIBILITIES. IF THE NOTES HAVE BEEN ALTERED, IT'S CORRECT, ONE POSSIBILITY IS THAT IF HE WERE TO SEE THAT, HE MIGHT SAY, OH, I'M SORRY, I DIDN'T MEAN TO SUGGEST THIS WAS A CONTEMPORANEOUS NOTE OF A CONVERSATION. IT'S ACTUALLY AN ANALYSIS THAT I ENTERED AFTER THE CONVERSATION OR AFTER LOOKING BACK AT THE NOTES, AND THAT MIGHT CLARIFY IT. BUT, YOU KNOW, SO IT MIGHT BE AT THAT LEVEL. HE MAY NOT RECALL WHY THE NOTES ARE DIFFERENT. I THINK THAT'S MOST LIKELY TO BE WHAT THE WITNESS HIMSELF IS GOING TO SAY. THE QUESTION IS, YOU KNOW, DO WE KNOW WHEN THAT WAS DONE RELATIVE TO THE VALUE IN CONTROVERSY?
JUDGE DAVILA: SO THE VALUE, THE VALUE, I THINK WHAT IS IMPORTANT TO YOU IS HE TESTIFIED THAT HE MADE, FOR EXAMPLE, IN HIS CONVERSATION, CONTEMPORANEOUS NOTES.
MR. DOWNEY: RIGHT.
JUDGE DAVILA: AND MAYBE HE HASN'T.
MR. DOWNEY: RIGHT.
JUDGE DAVILA: AND MAYBE HE ADDED THAT LATER AND, THEREFORE, THAT CALLS INTO QUESTION HIS TESTIMONY THAT, I MADE CONTEMPORANEOUS NOTES AT THE TIME I TALKED.
MR. DOWNEY: THAT'S RIGHT, YOUR HONOR. AND AGAIN, JUST TO REFER TO THE EXAMPLE THAT I REFERRED TO BEFORE AND THAT MR. BOSTIC REFERRED TO, THE ENTRY OF THE PHARMACEUTICAL COMPANIES IN A DIFFERENT -- I THINK MR. BOSTIC IS CORRECT IT'S ON PAGE 13, YOU KNOW, I THINK YOUR HONOR RECALLS THAT ON WEDNESDAY THAT WAS A SUBJECT OF TESTIMONY FROM HIM, IT WAS IMPORTANT TO HIM, IT WAS A VERIFICATION AS TO WHY HE SHOULD INVEST. I ASKED HIM SOME QUESTIONS ON CROSS.
JUDGE DAVILA: WHY DOES IT MATTER IF IT'S ON PAGE 7 OR PAGE 13 OF HIS NOTES?
MR. DOWNEY: IT DOESN'T MATTER. I WAS IN ERROR SAYING --
JUDGE DAVILA: WHY ARE THE PAGES -- IF IT'S NOT PAGINATED CORRECTLY, WHY DOES THAT MATTER?
MR. DOWNEY: THE ISSUE IS THAT IT'S IN A DIFFERENT COLORED INK, AND IT WAS APPEARS TO HAVE BEEN ENTERED AT A DIFFERENT TIME WHEN IT WAS PRESENTED AS CONTEMPORANEOUSLY RECORDED NOTES FOR PURPOSES OF REFRESHING HIS RECOLLECTION OF A CONVERSATION WITH MS. HOLMES AND HIM THEN SAYING, I HAD THIS CONVERSATION, AND THAT'S THE REASON THAT I INVESTED.
JUDGE DAVILA: OKAY. WELL, IT'S, IT'S NOW 11:35 OR SO. WHERE ARE YOU WITH YOUR CROSS-EXAMINATION OF THE WITNESS?
MR. DOWNEY: I'M STILL HOPEFUL THAT, OTHER THAN THIS ISSUE, THE CROSS-EXAMINATION COULD PROBABLY FINISH BY 1:00, WHICH WOULD BE OUR PLANNED ENDING TIME. BUT I'M NOT SURE -- IT'S POSSIBLE THAT THE REDIRECT COULD BE CONDUCTED AS WELL, BUT I'M NOT 100 PERCENT SURE OF THAT.
JUDGE DAVILA: IS THIS IN LIGHT OF THE NOTE ISSUE OR IS THIS WHAT YOU HAD PLANNED ALL ALONG?
MR. DOWNEY: NO, WITHOUT REGARD TO THE NOTE ISSUE.
JUDGE DAVILA: BECAUSE I THOUGHT OUR ORIGINAL PLAN WAS THAT THEY WOULD FINISH THIS WITNESS TODAY AND WE WOULD HAVE TIME FOR ANOTHER WITNESS.
MR. DOWNEY: YEAH, BUT I THINK WE'VE BEEN MORE THAN -- HALF AN HOUR BEYOND OUR PROJECTED BREAK TIME.
JUDGE DAVILA: RIGHT.
MR. DOWNEY: I THINK THAT'S THE ISSUE.
JUDGE DAVILA: RIGHT. SO -- YOU KNOW, THE TIME ESTIMATES ARE A LITTLE FUZZY HERE.
MR. DOWNEY: I THINK IT'S --
JUDGE DAVILA: NOT JUST NOW, BUT WHENEVER WE HAVE PROJECTED THROUGH THE TRIAL, I'VE ASKED FOR THAT QUESTION. I KNOW IT'S A MOVEABLE FEAST. YOU CAN'T ALWAYS BE ACCURATE ON TIMING. BUT FOR ALL OF THE REASONS WE HAVE TALKED ABOUT, IT'S IMPORTANT, AT LEAST FOR MY MANAGEMENT OF THE TRIAL, THAT I TRY TO KEEP THINGS GOING.
MR. DOWNEY: OF COURSE.
JUDGE DAVILA: WELL, WHY DON'T WE -- IT SOUNDS LIKE THIS IS AN ISSUE FOR YOU, AND I'D LIKE TO TAKE CARE OF THIS AS SOON AS WE CAN. IF WE'RE GOING TO DISCUSS THESE NOTES, THERE'S TWO WAYS TO DO IT. WE CAN BRING HIM IN RIGHT NOW AND YOU CAN VOIR DIRE ON A LIMITED BASIS ABOUT THE COLOR CHANGE OF THE INK, THE PAGINATION, WHAT THEY WERE, THOSE TYPES OF THINGS, WHETHER OR NOT THEY WERE CONTEMPORANEOUS WITH HIS CONVERSATION. ARE THOSE THE THREE ISSUES THAT YOU WANT?
MR. DOWNEY: WELL, YOUR HONOR, IN FAIRNESS, I HAVE TO SAY THESE ARE ALMOST 40 PAGES OF NOTES. I'VE ONLY HAD 30 MINUTES TO EXAMINE THEM. SO MY PREFERENCE WOULD BE TO HAVE AN OPPORTUNITY -- I'M NOT CERTAIN THERE WILL BE AN ISSUE HERE. MY PREFERENCE WOULD BE TO HAVE AN OPPORTUNITY TO REVIEW THEM MORE CAREFULLY COMPARED TO THE COPY THAT WAS INTRODUCED AS EXHIBIT 14. BUT IF THE REMEDY YOUR HONOR DECIDES ON IS THAT, I CAN DO IT. THE HESITATION I HAVE WITH THAT REMEDY IS THAT WE HAVE, YOU KNOW -- YOU KNOW, WE'RE IMPINGING MORE ON, I KNOW, THE ISSUE YOUR HONOR.
JUDGE DAVILA: WELL, IT'S JUST WHERE DO WE PUT THAT DELAY, RIGHT, IN THE FRONT OR THE BACK?
MR. DOWNEY: YEAH.
JUDGE DAVILA: BECAUSE IT SOUNDS LIKE IF WE DON'T DEAL WITH IT TODAY -- AND PARDON ME, I DON'T WANT YOU TO FILL TIME JUST TO FILL THE DAY KNOWING WE ARE GOING TO HAVE TO DEAL WITH THIS.
MR. DOWNEY: NO, YOUR HONOR. WE HAVE SEVERAL OTHER SUBJECTS RELATED TO HIS -- OFFERS TO THIS WITNESS TO BUY THERANOS STOCK, YOU KNOW, FOUR OR FIVE DIFFERENT TIMES AND TURNING IT DOWN AND SO FORTH. I THINK THAT'S IN THE NEIGHBORHOOD OF AN HOUR, HOUR AND 15 MINUTES. THAT'S WHAT I THINK WOULD -- THAT'S WHY I'M HESITANT.
JUDGE DAVILA: THANK YOU FOR THAT. I WONDER IF YOU JUST BROACH THESE QUESTIONS WITH HIM ABOUT THE COLOR CHANGE, WHETHER THEY WERE CONTEMPORANEOUS OR NOT, MAYBE YOU'LL GET THE ANSWER TO YOUR QUESTION TODAY, RIGHT NOW, IF WE BRING HIM IN AND ASK HIM.
MR. DOWNEY: WELL, YOUR HONOR, I'M HAPPY TO DO THAT. I WOULD JUST ASK THAT IF WE APPROACH THE PROBLEM THAT WAY, THAT WE BE ALLOWED TO -- THAT THE DEPUTY RETAIN THE NOTES AND WE BE ALLOWED TO HAVE ACCESS TO THE NOTES FOR PURPOSES OF MAKING SURE WE'RE COMFORTABLE WITH ANY TESTIMONY ALONG THOSE LINES.
JUDGE DAVILA: SO HOW ARE YOU GOING TO REVIEW THESE? YOU DON'T HAVE COPIES OF THESE?
MR. DOWNEY: I DON'T HAVE A COLOR COPY. IT'S A LITTLE BIT OF A DIFFICULT EXAMINATION TO CONDUCT FOR THAT REASON, AND I DON'T THINK WE HAVE THE ABILITY IMMEDIATELY TO MAKE A COLOR COPY THAT I KNOW OF. LET ME CHECK ON THAT. OH, WE COULD MAKE A COLOR COPY, SO MAYBE THAT WOULD BE HELPFUL.
JUDGE DAVILA: ALL RIGHT. WELL, LET'S BRING THE WITNESS AND THE JURY IN. LET'S CONTINUE YOUR EXAMINATION, AND I'LL ASK YOU TO PROCEED WITH YOUR EXAMINATION. WE'LL KEEP THE NOTES FOR NOW AND I'LL TELL HIM OUTSIDE OF THE PRESENCE OF THE JURY THAT WE'RE GOING TO KEEP THEM, MAKE PHOTOCOPIES. IT SOUNDS LIKE HE'S NOT GOING TO BE DONE TODAY. HE'S NOT GOING TO BE FINISHED TODAY.
MR. DOWNEY: LET'S TRY.
JUDGE DAVILA: I APPRECIATE THAT.
MR. DOWNEY: YEAH.
MR. BOSTIC: YOUR HONOR, I JUST WANT TO MAKE SURE THAT WE'RE CLEAR. MY UNDERSTANDING IS THAT THE PARTIES AGREE THAT THIS TOPIC WON'T BE BROACHED WITH THE WITNESS IN FRONT OF THE JURY, AT LEAST PENDING FURTHER DISCUSSION.
JUDGE DAVILA: THAT'S MY UNDERSTANDING.
MR. DOWNEY: CERTAINLY.
MR. BOSTIC: JUST TO CLARIFY, COUNSEL MADE REFERENCE TO EXHIBIT 14 BEING INTRODUCED OR ENTERED, AND I WANT THE RECORD CLEAR, IT'S NOT IN EVIDENCE AND IT HAS NOT BEEN OFFERED.
JUDGE DAVILA: THE NOTES ARE NOT EVIDENCE.
MR. DOWNEY: I COMPLETELY RECOGNIZE THAT.
JUDGE DAVILA: THE NOTES WERE REFERENCED. I SAW HIM LOOK AT HIS NOTES WHILE HE WAS TESTIFYING, BOTH YOUR QUESTIONS, MR. DOWNEY, AND THE GOVERNMENT'S, AND THERE WAS NO COMMENT. I THINK YOU ASKED HIM AT ONE TIME, ARE YOU READING YOUR NOTES THERE?
MR. DOWNEY: YES.
JUDGE DAVILA: AND YOU DIDN'T ASK ANYTHING FURTHER.
MR. DOWNEY: NO. THAT'S CORRECT.
JUDGE DAVILA: OKAY. ALL RIGHT. WE'LL BRING THE JURY IN.
MR. BOSTIC: THANK YOU, YOUR HONOR.
(JURY IN AT 11:39 A.M.)
JUDGE DAVILA: PLEASE BE SEATED. COUNSEL ARE PRESENT. MS. HOLMES IS PRESENT AND THE JURY IS PRESENT. MR. EISENMAN HAS RETURNED TO THE STAND. MR. DOWNEY, YOU HAVE ADDITIONAL QUESTIONS?
MR. DOWNEY: I DO, YOUR HONOR.
MR. DOWNEY: MR. EISENMAN, YOU RECALL BEFORE WE BREAK WE WERE TALKING ABOUT YOUR CONVERSATION WITH MR. BALWANI PRIOR TO YOUR INVESTMENT IN 2013?
ALAN EISENMAN: YES.
MR. DOWNEY: I'D LIKE TO ASK YOU TO LOOK AT THE EXHIBIT THAT IS MARKED AS 1370 IN YOUR NOTEBOOK. DO YOU HAVE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU SEE THAT THIS IS A LONG SERIES OF EMAIL EXCHANGES IN CONNECTION WITH THE OFFER OF AN ADDITIONAL INVESTMENT BY THERANOS AT THE END OF 2013?
ALAN EISENMAN: YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 1370.
MR. BOSTIC: I BELIEVE THAT IS ALREADY IN EVIDENCE, YOUR HONOR. OR IT MAY BE A DIFFERENT VERSION. AT ANY RATE, THERE'S NO OBJECTION.
MR. DOWNEY: I THINK IT'S A DIFFERENT VERSION.
JUDGE DAVILA: IT'S ADMITTED, AND IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 1370 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AT THIS TIME, AT THE END OF THE YEAR IN 2013, YOU WERE EXCHANGING MESSAGES AND PERHAPS EVEN PHONE CALLS WITH MR. BALWANI ABOUT THE POTENTIAL INVESTMENT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND IF WE LOOK ON THE FIRST PAGE OF THE SECOND EMAIL, THE ONE THAT IS FROM YOU TO MR. BALWANI --
ALAN EISENMAN: YES.
MR. DOWNEY: -- YOU ASKED MR. BALWANI BY EMAIL FOR INFORMATION ABOUT THE THERANOS INVESTMENT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOU ASKED HIM HOW BIG THE ROUND WOULD BE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND WHETHER DIRECTORS WERE PARTICIPATING IN THE ROUND; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND WHETHER THERE WOULD BE ANOTHER EQUITY OFFERING AFTER JANUARY 1ST; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND HE RESPONDED TO YOU AT THE TOP OF PAGE 1 OF EXHIBIT 1370, AND HE SAID, "WE CAN'T ANSWER YOUR QUESTIONS ABOUT DIRECTORS, OTHER INVESTORS AND CERTAINLY NOT ABOUT ANY FUTURE INVESTMENT ROUNDS AND SPECULATE ON WHAT THOSE VALUATIONS MAY BE. THOSE MAY OR MAY NOT HAPPEN." DO YOU SEE THAT?
ALAN EISENMAN: THAT CONTRADICTED HIS EARLIER WORDS.
MR. DOWNEY: OKAY. AND DO YOU SEE IN THE SECOND PARAGRAPH OF THE EMAIL HE TOLD YOU THAT HIS PERSONAL ASSISTANTS WERE NOT PRIVY TO CONFIDENTIAL FINANCIAL INFORMATION. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND DO YOU KNOW WHY HE WAS TELLING YOU THAT?
MR. DOWNEY: HAD YOU BEEN LEAVING MESSAGES WITH THEM ASKING FOR FINANCIAL DETAILS ABOUT THE COMPANY?
ALAN EISENMAN: NOT TO MY RECOLLECTION.
MR. DOWNEY: HAD YOU BEEN ASKING THEM QUESTIONS ABOUT THE ACTIVITIES OF THE COMPANY?
MR. DOWNEY: NOW, I WANT TO SHOW YOU -- I JUST WANT TO SHOW YOU THIS EXHIBIT FOR PURPOSES TO SEE IF IT REFRESHES YOUR RECOLLECTION, SO I DON'T WANT YOU TO DESCRIBE THE EXHIBIT BECAUSE IT'S NOT IN EVIDENCE. TAKE A LOOK AT EXHIBIT -- WELL, LET ME PASS THAT EXHIBIT BECAUSE IT WILL REQUIRE A BIT MORE TIME TO GO INTO THAT. LET ME TURN TO THE QUESTIONS RELATED TO WHAT YOUR UNDERSTANDING WAS OF THE RISK LEVEL OF THE INVESTMENT. OKAY?
ALAN EISENMAN: OKAY.
MR. DOWNEY: YOU RECALL THAT BACK IN 2010 MS. HOLMES HAD TOLD YOU THAT AN INVESTMENT IN THERANOS CARRIED IMMENSE RISKS. DO YOU RECALL THAT?
ALAN EISENMAN: I DON'T.
MR. DOWNEY: LET ME ASK YOU TO PULL BACK UP EXHIBIT 12285.
ALAN EISENMAN: OKAY.
MR. DOWNEY: DO YOU HAVE THAT?
ALAN EISENMAN: UH-HUH.
MR. DOWNEY: OKAY. IF YOU LOOK AT THIS EXHIBIT, YOU'LL SEE THAT THE SECOND PART OF THIS EMAIL IS THE EMAIL THAT WE LOOKED AT BEFORE FROM JUNE OF 2010. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IF YOU LOOK AT THE THIRD PARAGRAPH OF THE EMAIL THAT BEGINS, "AS YOU'VE ACKNOWLEDGED."
ALAN EISENMAN: YES.
MR. DOWNEY: AND IT GOES ON TO SAY, AS YOU'VE ACKNOWLEDGED, THERANOS IS AN EARLY LIFE STAGE SCIENCE, I THINK SHE MEANT TO SAY COMPANY. I'M SORRY. LET ME JUST REREAD IT. "AS YOU HAVE ACKNOWLEDGED, THERANOS IS AN EARLY STAGE LIFE SCIENCES STARTUP AND BY ITS VERY NATURE CARRIES IMMENSE RISK AND UNPREDICTABILITY AS YOU ALREADY KNOW AS A SAVVY INVESTOR. THIS MAY NOT CHANGE FOR YEARS TO COME." DID MS. HOLMES TELL YOU THAT IN 2010 ABOUT INVESTING IN THERANOS?
ALAN EISENMAN: THIS IS A SURPRISE AND A DIRECT CONTRADICTION TO MANY OTHER EARLIER EMAILS AND CONVERSATIONS I HAD. SIX YEARS AFTER WE INVESTED, I HAD A WHOLE STREAM OF INFORMATION THAT THE COMPANY WAS ON THEIR WAY TO DOING HUNDREDS OF MILLIONS OF DOLLARS OF REVENUE, DOING CONTRACTS WITH MAJOR PHARMACEUTICAL COMPANIES. THEY HAD SEVEN, SEVEN CLINICAL TRIALS WITH BRISTOL MYERS THAT WENT FLAWLESS. I'VE GOT EMAIL AFTER EMAIL. THIS IS A TOTAL CONTRADICTION TO EVERYTHING UP TO THIS POINT.
MR. DOWNEY: I MOVE TO STRIKE THAT, YOUR HONOR. AND I'M GOING TO TRY TO RE-ASK THE QUESTION.
JUDGE DAVILA: ALL RIGHT. THAT LAST ANSWER IS STRICKEN AS NONRESPONSIVE, AND YOU CAN ASK ANOTHER QUESTION.
BY MR. DOWNEY:
MR. DOWNEY: LET ME ASK YOU TO LOOK AT THE FOURTH BULLET POINT. DO YOU SEE WHERE THERE'S A SERIES OF BULLET POINTS?
ALAN EISENMAN: I DO.
MR. DOWNEY: AND DO YOU SEE THERE IN THE FIRST BULLET POINT THE FIRST SENTENCE READS, "WE DO NOT CURRENTLY HAVE PLANS TO GO IPO BY THE END OF 2011." DO YOU SEE THAT?
ALAN EISENMAN: I DO.
MR. DOWNEY: AND YOU ACKNOWLEDGE THAT YOU RECEIVED THIS EMAIL IN 2010?
ALAN EISENMAN: AGAIN, THIS IS A DIRECT CONTRADICTION TO MANY EARLIER COMMUNICATIONS.
JUDGE DAVILA: SIR, SIR, EXCUSE ME, SIR. DID YOU HEAR THE QUESTION?
ALAN EISENMAN: I DID. BUT IT'S MISLEADING. I'M SORRY.
JUDGE DAVILA: THE WAY THIS WORKS, SIR, IS THAT A QUESTION IS ASKED AND YOU'LL HAVE TO WAIT FOR THE QUESTION.
ALAN EISENMAN: OKAY. ASK THE QUESTION AGAIN AND I'LL RESPOND.
JUDGE DAVILA: WELL, HE'S NOT GOING TO DO THAT BECAUSE I'M NOT FINISHED.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: YOU SEE, THAT'S HOW IT WORKS.
ALAN EISENMAN: OKAY. SORRY.
JUDGE DAVILA: NO, THAT'S QUITE ALL RIGHT. YOU HAVE TO WAIT UNTIL THE QUESTION IS COMPLETED, AND THEN TAKE WHATEVER TIME YOU NEED TO GIVE A THOUGHTFUL ANSWER TO THE QUESTION, TO THE QUESTION ITSELF.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: ALL RIGHT. IF YOU NEED CLARIFICATION OF THE QUESTION, YOU CAN ASK A LAWYER IF THEY NEED TO CLARIFY BECAUSE YOU DON'T UNDERSTAND, AND THAT'S FAIR.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: WE WANT TO MAKE SURE EVERY WITNESS UNDERSTANDS THE QUESTION SO THEY CAN GIVE A FULL ANSWER.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: THAT'S WHAT THIS IS. SO I'LL ASK MR. DOWNEY TO ASK ANOTHER QUESTION, PLEASE.
BY MR. DOWNEY:
MR. DOWNEY: DO YOU ACKNOWLEDGE THAT MS. HOLMES TOLD YOU IN 2010 THAT THERANOS WAS AN EARLY STAGE LIFE SCIENCES STARTUP THAT CARRIED RISK. DO YOU ACKNOWLEDGE THAT?
ALAN EISENMAN: I ACKNOWLEDGE THAT THIS IS WHAT WAS COMMUNICATED IN 2010, BUT IT CONTRADICTS MANY OTHER THINGS THAT I WAS LED TO BELIEVE PRIOR TO THIS.
MR. DOWNEY: OKAY. AND YOU ACKNOWLEDGE THAT SHE TOLD YOU IN 2010 THAT THERANOS'S STATUS AS AN EARLY STAGE LIFE SCIENCES STARTUP THAT CARRIED IMMENSE RISK MIGHT NOT CHANGE FOR YEARS TO COME? YOU ACKNOWLEDGE THAT BASED ON THE --
ALAN EISENMAN: I ACKNOWLEDGE THAT BASED ON THIS EMAIL. BUT IT CONTRADICTS EARLIER COMMUNICATIONS.
MR. DOWNEY: OKAY. BUT YOU ACKNOWLEDGE THAT YOU RECEIVED THE EMAIL?
ALAN EISENMAN: I DO ACKNOWLEDGE THAT I RECEIVED THIS EMAIL, YES, SIR.
MR. DOWNEY: LET'S GO BACK TO THE INVESTMENT DECISION SORT OF IN THE LATE YEAR OF 2013 AND LOOK AT THE COMMUNICATIONS THAT YOU RECEIVED AROUND THAT OFFER. AND TO DO THAT, IF YOU WOULD LOOK BACK AT EXHIBIT 1370. AND WE HAVE LOOKED AT THIS EXHIBIT BEFORE, BUT NOW I'M INTERESTED IN PAGE 4 OF THE EXHIBIT.
ALAN EISENMAN: OKAY.
MR. DOWNEY: DO YOU SEE THE EMAIL THAT IS SORT OF THE SECOND HALF, THE BOTTOM EMAIL ON THE PAGE 4 OF 1370 THAT BEGINS, "DEAR STOCKHOLDER"?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THIS WAS A COMMUNICATION THAT WAS SENT OUT TO ALL OF THE SHAREHOLDERS IN THE COMPANY, INCLUDING YOU; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THIS INFORMED YOU AS TO A NUMBER OF THINGS, THAT THERE WAS AN INVESTMENT OFFER IN THERANOS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: I'D ASK YOU TO LOOK DOWN TO THE FOURTH LINE OF THE NEXT PAGE, WHICH IS PAGE 5, AND I'LL ASK YOU TO BLOW THAT UP, WHICH BEGINS "AS PART OF THIS INITIATIVE."
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND THERE'S A REFERENCE IN THIS SENTENCE TO FINANCIAL TRANSACTIONS WITH STRATEGIC PARTNERS THAT THERANOS WAS CONCLUDING. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN IN THE NEXT SENTENCE, IT GOES ON TO SAY THAT THERANOS WAS COMPLETING EQUITY TRANSACTIONS WITH STRATEGIC ENTITIES WHO HAD PREVIOUSLY INVESTED IN THERANOS AND HAD THE OPTION TO INVEST ADDITIONAL EQUITY THROUGH THE END OF 2013. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: NOW, YOU KNEW THAT ABOUT THREE MONTHS BEFORE THIS EMAIL, THERANOS HAD ANNOUNCED ITS PARTNERSHIP WITH WALGREENS; RIGHT?
ALAN EISENMAN: I DON'T RECALL THE TIMELINE.
MR. DOWNEY: OKAY. BUT YOU RECALL IT WAS SOME POINT BEFORE YOUR DECISION TO INVEST IN DECEMBER OF 2013 THAT YOU KNEW THAT THERE WAS A PARTNERSHIP BETWEEN THERANOS AND WALGREENS; CORRECT?
ALAN EISENMAN: AGAIN, I DON'T RECALL THE TIMELINE.
MR. DOWNEY: OKAY. DO YOU THINK THAT YOU DID NOT KNOW AT THE TIME OF THIS INVESTMENT THAT THERANOS HAD A PARTNERSHIP WITH WALGREENS?
ALAN EISENMAN: I WOULD HAVE TO REVIEW MY NOTES OR REVIEW INFORMATION. I DON'T RECALL THE TIMELINE.
MR. DOWNEY: OKAY. LET'S GO ON TO THE NEXT SENTENCE OF THIS EMAIL WHICH GOES ON TO SAY, "THE PRICE PER SHARE OF THERANOS SERIES C-1 PREFERRED STOCK IN THE TRANSACTIONS CLOSING BETWEEN NOW AND DECEMBER 31ST, 2013 IS $75 A SHARE." DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: NOW, REMIND US WHAT YOU HAD PAID IN 2006 FOR SHARES IN THERANOS IN SERIES C.
ALAN EISENMAN: I BELIEVE IT WAS $2.82.
MR. DOWNEY: $2.82. SO WHEN YOU RECEIVED THIS COMMUNICATION, YOU REALIZED THAT THE VALUE OF THOSE SHARES HAD GONE UP FROM $2.82 UP TO $75 PER SHARE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND I THINK WE TALKED ON WEDNESDAY ABOUT THE FACT THAT WHEN YOU INVESTED IN 2006 THAT YOU HAD PURCHASED A LITTLE OVER 2,000 SHARES; RIGHT?
ALAN EISENMAN: I DON'T RECALL THE NUMBER.
MR. DOWNEY: OKAY. BUT YOU REMEMBER IN DOLLAR FIGURES YOUR INVESTMENT WAS A LITTLE BIT OVER A MILLION ONE?
ALAN EISENMAN: YES.
MR. DOWNEY: NOW, IF YOU WERE TO MULTIPLY THE INVESTMENT THAT YOU MADE IN 2006 BY THIS INCREASE IN THE VALUE OF SHARES, YOU REALIZED WHEN YOU RECEIVED THIS COMMUNICATION THAT YOU WERE HOLDING SHARES OF THERANOS THAT WERE NOW WORTH ABOUT $30 MILLION; RIGHT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THAT'S MORE THAN 2000 PERCENT RETURN; CORRECT?
ALAN EISENMAN: I'D HAVE TO USE A CALCULATOR.
MR. DOWNEY: BUT A BIG RETURN WE CAN AGREE; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU HAD HEARD SOMETHING THAT YOU REFERENCED IN THE EMAIL TO MR. BALWANI THAT THERE MIGHT BE ANOTHER EQUITY OFFERING SHORTLY AFTER JANUARY 1, 2014; CORRECT?
ALAN EISENMAN: THAT WAS COMMUNICATION FROM SUNNY TO ME.
MR. DOWNEY: OKAY. HE TOLD YOU THAT --
ALAN EISENMAN: HE TOLD ME THERE WAS GOING TO BE ANOTHER INSTITUTIONAL ROUND SHORTLY AFTER THIS ONE CLOSED AT $17, THAT THIS IS WHAT IS CALLED A FRIENDS AND FAMILY ROUND, AND IT WAS BASICALLY DOING US A FAVOR SINCE WE HAD BEEN LONG-TIME SHAREHOLDERS.
MR. DOWNEY: RIGHT. SINCE YOU HAD ALREADY INVESTED YEARS AGO, YOU COULD BUY BEFORE THE END OF THE YEAR AT $15 A SHARE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND PRESUMABLY, IF YOU WANTED, YOU COULD BUY AFTER THE NEW YEAR, BUT YOU WOULD GET A SLIGHTLY REDUCED PRICE?
ALAN EISENMAN: NO. WE WEREN'T OFFERED -- WHAT WAS TOLD TO ME WAS IT WAS AN INSTITUTIONAL ROUND AND THEY WERE SELLING IT TO INSTITUTIONS, NOT TO INDIVIDUALS.
MR. DOWNEY: I SEE. AND YOU WERE CURIOUS, IN YOUR COMMUNICATIONS, TO VERIFY WITH MR. BALWANI WHETHER THAT WAS TRUE; RIGHT? WE LOOKED AT THAT A MOMENT AGO?
ALAN EISENMAN: YES.
MR. DOWNEY: DO YOU KNOW WHETHER THERANOS MADE AN OFFERING IN 2013 TO INSTITUTIONAL INVESTORS OF $17 A SHARE?
ALAN EISENMAN: I TRIED TO FIND OUT, AND I WAS SHUT OUT OF THAT COMMUNICATION.
MR. DOWNEY: OKAY. BUT NOW IN 2021, YOU KNOW THAT THERANOS DID MAKE AN EQUITY OFFERING OF SHARES AT $17 A SHARE TO INSTITUTIONAL INVESTORS; CORRECT?
ALAN EISENMAN: I DON'T HAVE ANY INFORMATION TO CONFIRM THAT.
MR. DOWNEY: NOW, I WANT YOU TO JUST -- IN THE INTEREST OF TIME I'M GOING TO SHOW YOU EXHIBIT 3530, AND I'M NOT GOING TO ASK YOU TO REVIEW IT INDIVIDUALLY, BUT I WANT TO GIVE YOU A MOMENT TO LOOK AT EXHIBIT 3530 AND TO CONFIRM FOR US THAT THIS IS THE STOCK PURCHASE AGREEMENT THAT YOU'VE SIGNED IN CONNECTION WITH YOUR 2013 INVESTMENT. AND IN THAT REGARD, I WOULD ASK YOU TO LOOK PARTICULARLY AT PAGE 29, WHICH IS THE SIGNATURE PAGE.
ALAN EISENMAN: OKAY.
MR. DOWNEY: IS THAT RIGHT, THIS IS THE STOCK PURCHASE AGREEMENT THAT YOU SIGNED IN CONNECTION WITH YOUR 2013 INVESTMENT?
ALAN EISENMAN: I DON'T KNOW BECAUSE THE FRONT PAGE SAYS INITIAL CLOSING DATE JULY 1ST, 2010.
MR. DOWNEY: WELL, THAT'S AN AMENDMENT OF A STOCK PURCHASE AGREEMENT THAT HAD BEEN MADE IN 2010, AND THIS WAS AN AMENDMENT THAT WAS BEING ENACTED AT THE END OF 2013; CORRECT?
ALAN EISENMAN: I DON'T KNOW.
MR. DOWNEY: WELL, LET ME ASK YOU TO LOOK AT THE FIFTH PAGE OF THE EXHIBIT. JUST TAKE A MOMENT TO REVIEW THE FIRST PARAGRAPH AND THEN THE PARAGRAPHS A THROUGH D.
ALAN EISENMAN: OKAY.
MR. DOWNEY: DOES THAT REFRESH YOUR RECOLLECTION THAT THERE HAD BEEN A -- THAT THIS DOCUMENT WAS AN AMENDMENT OF AN EARLY STOCK PURCHASE AGREEMENT AND THAT IT WAS IN CONNECTION WITH THE CLOSINGS WHICH WERE HELD ON DECEMBER 31ST, 2013?
ALAN EISENMAN: IT DOESN'T REFLECT MY RECOLLECTION. I'M READING IT NOW, AND IT APPEARS THAT THIS WAS A 2010 AGREEMENT THAT WAS AMENDED, BUT I DON'T RECALL.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK BRIEFLY AT PAGE 11, SECTION 4. THAT'S PAGE 11 OF THE EXHIBIT. AND MY QUESTION TO YOU IS ONLY, WITHOUT GOING THROUGH THEM INDIVIDUALLY, YOU ACKNOWLEDGED THAT YOU MADE THE SAME REPRESENTATIONS AND WARRANTIES ABOUT YOUR INVESTMENT IN 2013 THAT YOU HAD MADE IN 2006; IS THAT RIGHT?
ALAN EISENMAN: WELL, AGAIN, I'D HAVE TO LOOK AT THE 2006 AGREEMENT AND THE 2010 AMENDED TO 2013. I PRESUME IF YOU SAY SO, THAT THE LANGUAGE IS THE SAME. BUT I WOULDN'T KNOW WITHOUT COMPARING.
MR. DOWNEY: WELL, LET'S JUST LOOK THROUGH IT VERY QUICKLY. IF YOU LOOK AT PARAGRAPH 4.4. DO YOU SEE THAT?
ALAN EISENMAN: YES, I DO.
MR. DOWNEY: DO YOU AGREE WITH ME, DO YOU NOT, THAT THIS AGREEMENT ACKNOWLEDGES THAT THE COMPANY HAD A LIMITED FINANCIAL AND OPERATING HISTORY?
ALAN EISENMAN: I WOULDN'T AGREE WITH THAT AT ALL.
MR. DOWNEY: OKAY. BUT YOU AGREE THAT YOU ACKNOWLEDGED IT WHEN YOU SIGNED THIS AGREEMENT?
ALAN EISENMAN: I WOULD AGREE THAT THIS IS BOILERPLATE. IT'S IN EVERY AGREEMENT LIKE THIS, AND EVERYONE SIGNS IT. BUT THERE'S ALSO AN UNDERSTANDING WHAT YOU'RE INVESTING IN, AND THIS CONTRADICTS THE UNDERSTANDING WHAT I WAS INVESTING IN AT THE TIME.
MR. DOWNEY: OKAY. SO WHEN YOU SIGNED THIS LEGAL DOCUMENT SAYING THAT YOU ACKNOWLEDGED THAT THE COMPANY HAD A LIMITED FINANCIAL AND OPERATING HISTORY, YOU DID NOT MEAN FOR THERANOS TO RELY ON THE DOCUMENT THAT YOU WERE SENDING BACK TO THEM SIGNED?
ALAN EISENMAN: AGAIN, THIS, THIS CONTRADICTS EVERYTHING THAT I'D UNDERSTOOD UP TO THIS POINT IN TIME, AND THIS IS SOMETHING THAT IS IN EVERY DOCUMENT THAT YOU'RE INVESTING IN A NON-PUBLIC COMPANY, AND THIS IS WHAT WE CALL BOILERPLATE.
MR. DOWNEY: I'M ASKING YOU A LITTLE BIT OF A DIFFERENT QUESTION. WHEN YOU SIGNED THIS LEGAL DOCUMENT AT THE COMPANY'S REQUEST AND SENT IT BACK TO THEM, FIRST OF ALL, YOU ACKNOWLEDGED THAT THE DOCUMENT ACKNOWLEDGED THAT YOU KNEW THE COMPANY HAD A LIMITED FINANCIAL AND OPERATING HISTORY AND THAT THE INVESTMENT WAS HIGHLY SPECULATIVE?
MR. DOWNEY: YOU ACKNOWLEDGED THAT?
ALAN EISENMAN: NO, I'M NOT ACKNOWLEDGING THAT THAT'S MY UNDERSTANDING. I'M ACKNOWLEDGING THAT THIS IS BOILERPLATE. THAT IF YOU WANT TO INVEST, YOU MUST SIGN THIS. AND I HAD NO POWER TO CHANGE THIS. BUT THAT'S NOT MY UNDERSTANDING OF WHERE THE COMPANY WAS.
MR. DOWNEY: WELL, THE COMPANY DIDN'T PUT A GUN TO YOUR HEAD AND MAKE YOU INVEST, DID THEY?
ALAN EISENMAN: EXCUSE ME. I DON'T UNDERSTAND YOUR QUESTION.
MR. DOWNEY: YOU WERE PERFECTLY FREE NOT TO SIGN THIS DOCUMENT, WEREN'T YOU?
ALAN EISENMAN: SIGNING THE DOCUMENT WAS A PRECONDITION TO INVESTING IN SOMETHING THAT I WAS MADE OF THE UNDERSTANDING THAT THIS WAS A COMPANY THAT HAD PROVEN ITSELF, WAS SUCCESSFUL, AND THIS WAS A FAVOR TO BE ABLE TO INVEST AT $15 BECAUSE THEY WERE SUCCESSFUL AND ON THEIR WAY. AND AROUND THE CORNER THEY WERE GOING TO SELL A LOT OF STOCK TO INVESTORS AT $17 TO FURTHER HELP THE COMPANY GROW.
MR. DOWNEY: I SEE. SO YOU SAY THAT THE DOCUMENT WHICH CONSTITUTED THE DOCUMENT REFLECTING YOUR AGREEMENT, THAT HAD NO MEANING; CORRECT? THAT'S WHAT YOU'RE SAYING?
ALAN EISENMAN: I'M NOT SAYING THAT IT HAD NO MEANING, BUT THIS IS LEGAL BOILERPLATE THAT IS IN EVERY --
MR. DOWNEY: WHAT MEANING WOULD YOU ACKNOWLEDGE THAT IT HAD?
ALAN EISENMAN: CAN YOU REPHRASE YOUR QUESTION. I DON'T UNDERSTAND IT.
MR. DOWNEY: WELL, YOU ACKNOWLEDGED THAT THIS LEGAL DOCUMENT, WHICH YOU SIGNED, AND WHICH THERANOS RELIED ON, HAS SOME MEANING; RIGHT?
ALAN EISENMAN: NO, I DON'T ACKNOWLEDGE THAT.
MR. DOWNEY: YOU BELIEVE IT HAS NO MEANING. OKAY. LET'S MOVE NEXT TO THE ISSUE OF OPPORTUNITIES THAT YOU HAD AT VARIOUS POINTS IN TIME TO SELL YOUR SHARES IN THERANOS. DO YOU RECALL WHEN WE LOOKED AT SOME DOCUMENTS FROM MAY OF 2010 THAT THERE WAS A REFERENCE TO AN OFFER MADE TO YOU TO SELL YOUR STOCK AT FIVE TIMES WHAT YOU PAID FOR THEM?
ALAN EISENMAN: NOT A GENUINE OFFER, BUT I DO RECALL.
MR. DOWNEY: LET'S LOOK BACK AT EXHIBIT 14103. AND I'M LOOKING AT THE EMAIL AT THE TOP OF THAT EXHIBIT, THE VERY TOP EMAIL EXCHANGE, WHICH IS AN EMAIL FROM MS. HOLMES TO YOU. DO YOU HAVE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. AND I'M JUST DIRECTING YOUR ATTENTION TO THE LAST PARAGRAPH. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND MS. HOLMES SAYS TO YOU, "GIVEN YOUR FRUSTRATION LEVEL AND OUR FRUSTRATION LEVEL WITH THIS INTERACTION, I STRONGLY ENCOURAGE YOU TO RE-CONSIDER THE OPPORTUNITY I PRESENTED ON OUR LAST CALL TO REALIZE THE RETURN ON YOUR INVESTMENT. WE RECOGNIZE YOU HAVE BEEN AN INVESTOR FOR SOME TIME, AND IF WE PROCEED WITH THE TRANSACTION WE ARE PROPOSING WE CAN PROVIDE YOU WITH A GREATER THAN 5X RETURN ON YOUR INVESTMENT IN THERANOS." CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, HAD YOU SOLD YOUR SHARES IN 2013 IN THERANOS AT A 5X VALUATION, THAT WOULD HAVE BEEN A LITTLE BIT UNDER $6 MILLION FOR YOU; IS THAT RIGHT?
ALAN EISENMAN: THERE'S NO WAY I COULD HAVE SOLD MY SHARES AT 5X BECAUSE I WAS SERIOUSLY CONSIDERING THIS OFFER, AND THE COMPANY NEVER CAME THROUGH WITH THE OFFER. THEY JUST MENTIONED IT, AND THEY DROPPED THE BALL.
MR. DOWNEY: YOU DIDN'T RESPOND TO THIS EMAIL BY SAYING, BOY, I'LL TAKE THAT OFFER, DID YOU?
ALAN EISENMAN: I DON'T RECALL HOW I RESPONDED.
MR. DOWNEY: WELL, IN FACT, YOU SENT A SERIES OF EMAILS OVER THE NEXT SEVERAL MONTHS SAYING THAT YOU WANTED THIS PIECE OF INFORMATION, AND THAT PIECE OF INFORMATION, AND ANOTHER PIECE OF INFORMATION; CORRECT?
ALAN EISENMAN: WHICH IS A LOGICAL RESPONSE IF YOU'RE GOING TO SELL STOCK. YOU WOULD LIKE TO BE AN INFORMED INVESTOR, NOT TO BE TOTALLY HIDDEN AND ALL OF THE INFORMATION FROM THE COMPANY BEFORE YOU MAKE AN INVESTMENT DECISION. IT HAPPENS WITH EVERY OTHER INVESTMENT I'VE EVER BEEN IN. NOBODY HAS EVER TREATED ME THIS WAY.
MR. DOWNEY: IN OTHER WORDS, WHAT YOU'RE SAYING IS THAT YOU KNEW AT THE TIME THAT THE COMPANY WAS SIX YEARS OLD, THAT A RETURN WHICH MADE YOU $5 AND A HALF MILLION WAS NOT SUFFICIENT FROM YOUR PERSPECTIVE. YOU NEEDED MORE INFORMATION TO MAKE THAT DECISION; IS THAT RIGHT?
ALAN EISENMAN: IT IS CORRECT THAT TO MAKE ANY INVESTMENT DECISION YOU HAVE TO HAVE KNOWLEDGE ABOUT WHAT IS GOING ON WITH THE COMPANY. I DID NOT HAVE ANY KNOWLEDGE FOR AN EXTENDED PERIOD OF TIME, BUT I DID HAVE PRIOR KNOWLEDGE THAT THEY PROMISED THEY WERE GOING TO DO HUNDREDS OF MILLIONS OF DOLLARS OF REVENUE, THEY HAD ALL OF THESE CONTRACTS WITH MAJOR INTERNATIONAL PHARMACEUTICAL COMPANIES, THEY WERE, THEY WERE GOING INTO A SECOND LINE OF BUSINESS BY SELLING DATA. THERE WAS POTENTIAL VALUE IN THIS COMPANY AT A MUCH EARLIER STAGE, AND I WAS TOTALLY IN THE DARK FOR AN EXTENDED PERIOD OF TIME BEFORE THIS OFFER WAS MADE. AND AGAIN, I'LL EMPHASIZE, I CONSIDERED THIS OFFER, BUT IT NEVER CAME THROUGH. THEY NEVER FOLLOWED UP.
MR. DOWNEY: OKAY. THEN AFTER YOU INVESTED AGAIN IN DECEMBER OF 2013, YOU HAD OTHER OPPORTUNITIES TO SELL YOUR SHARES IN THERANOS; IS THAT RIGHT?
ALAN EISENMAN: COULD YOU REFRESH MY MEMORY.
MR. DOWNEY: SURE. LOOK AT -- YOUR HONOR, I'M SHOWING THE WITNESS EXHIBIT 2468, WHICH IS IN THE GOVERNMENT'S NOTEBOOK FROM FRIDAY. MAY I APPROACH THE WITNESS?
JUDGE DAVILA: YES, YES.
BY MR. DOWNEY:
MR. DOWNEY: (HANDING.)
JUDGE DAVILA: THIS IS THE REDACTED VERSION?
MR. DOWNEY: CORRECT. I BELIEVE SO.
MR. DOWNEY: AND ALL I'M REALLY INTERESTED IN HERE IS THE EMAIL AT THE BOTTOM OF PAGE 2 AT 8:26 A.M. ON MARCH 30, 2015. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IN THIS EMAIL YOU TELL MR. BALWANI THAT YOU HAD BEEN INFORMED OF AN OPPORTUNITY TO SELL THERANOS STOCK; IS THAT RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND I WANT TO GO UP ABOVE THAT. AND MR. BALWANI TELLS YOU THAT "THE LAST TRANSACTION WAS AT $17 PER SHARE AS YOU ALREADY KNOW." HE DIDN'T SAY THAT THERANOS WOULD EVER CONSIDER A LIQUIDITY EVENT IN 2015, AND HE DIDN'T KNOW ANYTHING ABOUT THE TRANSACTION BELOW. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: WHAT OPPORTUNITY HAD MR. BALWANI -- HAD COME TO YOUR ATTENTION THAT YOU WERE EMAILING MR. BALWANI ABOUT?
ALAN EISENMAN: YOU KNOW, I'M NOT SURE OF THE TIMELINE, AND I'M NOT SURE IF THIS WAS THE TRANSACTION. BUT I WAS APPROACHED BY CHRIS BOIES, WHO IS THE SON OF DAVID BOIES, WHO IS THE THERANOS COUNSEL, THAT IF I WAS WILLING TO SELL ALL OF MY STOCK AND THERE WAS ANOTHER COINVESTOR WHO WAS ALSO ASKING QUESTIONS, IF HE JOINED ME IN SELLING 100 PERCENT OF HIS STOCK, THAT THEY WERE WILLING TO BUY US OUT OF ALL OF OUR STOCK.
MR. DOWNEY: OKAY. LET ME -- WE'LL GET TO THAT IN A MOMENT. LET ME ASK YOU TO LOOK BRIEFLY AT THE TOP OF PAGE 3 OF THIS EMAIL TO SEE IF THIS IS A DIFFERENT EVENT. YOU CAN JUST HIGHLIGHT THE FIRST PARAGRAPH THERE. AND DO YOU SEE THERE THAT THERE IS A REFERENCE TO AN ENTITY CALLED BROADMARK?
ALAN EISENMAN: I DO.
MR. DOWNEY: AND WHAT IS BROADMARK?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: IS THAT FORM OF SOME ENTITY THAT WAS CREATED SPECIALLY TO INVEST IN THERANOS SHARES?
ALAN EISENMAN: CAN YOU TELL ME? I DON'T RECALL WHO BROADMARK IS.
MR. DOWNEY: WELL, I'M ASKING YOU. I DON'T KNOW. I WASN'T PART OF THESE EMAIL COMMUNICATIONS.
ALAN EISENMAN: YEAH, I DON'T RECALL WHO THEY ARE.
MR. DOWNEY: OKAY. AND DO YOU SEE THAT THE EMAIL GOES ON TO SAY THAT "THE SHARES ARE BEING SOLD BY EXISTING THERANOS SHAREHOLDERS"?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN IT GOES ON TO DESCRIBE SOME FINANCIAL ISSUES, VALUATION, AND PROVIDING AN OPPORTUNITY, ET CETERA; CORRECT?
ALAN EISENMAN: YEAH. I ALSO SEE IT SAYS THAT THEY'RE SUBJECT TO A RIGHT OF FIRST REFUSAL, SO YOU HAVE TO OFFER THEM TO THE COMPANY FIRST AND GET THEIR PERMISSION PRESUMABLY.
MR. DOWNEY: RIGHT. THIS WOULD NOT BE THE OFFER FROM THE COMPANY THAT YOU MENTIONED A MOMENT AGO; RIGHT?
ALAN EISENMAN: I STAND CORRECTED.
MR. DOWNEY: THIS WOULD BE AN OFFER BY A THIRD PARTY, WE WILL BUY YOUR SHARES; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN YOU WERE COMMUNICATING WITH MR. BALWANI ABOUT THAT; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: NOW, IN THIS OFFER IT CONVEYS THAT THERE WAS A $9 BILLION VALUATION IN MAY OF 2014. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND WHAT WOULD YOUR SHARES IN THERANOS BE WORTH, THE SHARES THAT YOU PAID A MILLION DOLLARS FOR, WHAT WOULD THEY BE WORTH AT A $9 BILLION VALUATION FOR THE COMPANY?
ALAN EISENMAN: I WOULD HAVE TO HAVE A CALCULATOR. YOU COULD PROBABLY TELL ME.
MR. DOWNEY: WELL, AM I RIGHT THAT IT WOULD BE SOMEWHERE BETWEEN $30 AND $35 MILLION?
ALAN EISENMAN: I DON'T KNOW.
MR. DOWNEY: OKAY. NOW, DID YOU PROCEED WITH THIS OFFER FROM BROADMARK TO SELL YOUR SHARES IN THERANOS?
ALAN EISENMAN: I, I DON'T HAVE A STRONG RECOLLECTION. I'M SURE THAT I PURSUED IT TO SEE IF IT WAS LEGITIMATE, AND I DON'T RECALL IF THIS OFFER WAS LEGITIMATE OR NOT, IF IT WAS REALLY AN OPPORTUNITY, BECAUSE THERE WERE A LOT OF OPPORTUNITIES FLOATING AROUND IN THE MARKET, AND MOST OF THEM WERE NOT LEGITIMATE.
MR. DOWNEY: AND IS IT FAIR TO SAY, JUST BASED ON YOUR RECOLLECTION, YOU DON'T HAVE A VERY STRONG RECOLLECTION OF THE BROADMARK OFFER TO YOU ONE WAY OR THE OTHER?
ALAN EISENMAN: NO, I DON'T.
MR. DOWNEY: LET ME ASK YOU TO LOOK AT 13150. AND I MAY HAVE TO GIVE YOU -- OH, NO. IT SHOULD BE IN YOUR NOTEBOOK.
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND WITH RESPECT TO THE EMAIL, EXCHANGES IN THIS EMAIL, ARE THEY EMAIL EXCHANGES BETWEEN -- ONE EMAIL IS BETWEEN YOU AND CHRIS BOIES; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND ONE EMAIL IS BETWEEN YOU AND MR. HARRIS, ANOTHER INVESTOR FROM HOUSTON; IS THAT RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. AND THESE ALL RELATE TO YOUR INVESTMENT IN THERANOS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 13150.
MR. BOSTIC: YOUR HONOR, JUST 401 AND BEYOND THE SCOPE OF THE DIRECT IN LIGHT OF THE TIMING.
(PAUSE IN PROCEEDINGS.)
JUDGE DAVILA: ALL RIGHT. THANK YOU. I'LL ALLOW IT. IT'S ADMITTED OVER OBJECTION. IT CAN BE PUBLISHED.
(DEFENDANT'S EXHIBIT 13150 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: I'LL ASK YOU TO LOOK AT THE BOTTOM EMAIL FIRST.
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND THIS IS AN EMAIL FROM YOU TO CHRIS BOIES; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU'RE REPORTING ON A CALL THAT YOU HAD HAD WITH SOME OF THE OTHER HOUSTON INVESTORS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: YOU'RE ASKING ABOUT A $15 OFFER TO BUY YOUR SHARES IN THERANOS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND $15 IS THE VALUATION THAT HAD BEEN GIVEN TO SHARES ABOUT A LITTLE OVER 18 MONTHS BEFORE THIS; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THE COMPANY HAD TOLD YOU, FOLLOWING UP ON SOME COMMUNICATIONS THAT YOU HAD WITH THEM, THAT IT WAS WILLING TO REPURCHASE YOUR SHARES IN THERANOS AT $15 A SHARE; CORRECT?
ALAN EISENMAN: INCORRECT.
MR. DOWNEY: OKAY. WELL, YOU REFERENCED $15 OFFERED BY THE COMPANY AT THE END OF THE FIRST PARAGRAPH OF YOUR EMAIL WITH CHRIS BOIES. DO YOU SEE THAT?
ALAN EISENMAN: THEY MADE AN OFFER AT $15 AND THEY NEVER FOLLOWED THROUGH. I TRIED TO CONTACT CHRIS BOIES FOR A PERIOD OF MONTHS, AND HE DID NOT RESPOND TO EMAILS OR CALLS, SO IT WAS A FALSE OFFER.
MR. DOWNEY: OKAY. WELL, LET'S START WITH WHAT THIS EMAIL REFLECTS. YOU'RE REFERRING TO A $15 OFFER FROM THE COMPANY THAT YOU HAD RECEIVED; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN YOU SAY, WELL, THE CURRENT VALUATION IS PROBABLY WELL IN EXCESS OF $15; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU WANT TO FIND OUT MORE INFORMATION ABOUT THE COMPANY THAT WOULD ALLOW YOU TO MAKE A JUDGMENT AS TO WHETHER YOU SHOULD, IN FACT, BE INVESTING AT MORE THAN -- IN FACT, YOUR INVESTMENT WAS WORTH MORE THAN $15 PER SHARE; CORRECT?
ALAN EISENMAN: A LOGICAL QUESTION BEFORE YOU MAKE AN INVESTMENT DECISION IS TO BE ARMED WITH FINANCIAL INFORMATION, AND WE HAD --
MR. DOWNEY: AND THAT'S WHAT YOU WERE TRYING TO DO?
ALAN EISENMAN: WE HAD NO FINANCIAL INFORMATION TO MAKE A RATIONAL DECISION.
MR. DOWNEY: OKAY. AND JUST TO SORT OF REORIENT US TO THIS VALUATION, IT'S THE SAME VALUATION AT WHICH YOU BOUGHT SHARES 18 MONTHS BEFORE. THIS OFFER, HOWEVER YOU CHARACTERIZE IT, THIS OFFER WAS AN OFFER TO BUY YOUR SHARES IN THERANOS AT SOMEWHERE BETWEEN $25 AND $30 MILLION IN THERANOS; RIGHT?
ALAN EISENMAN: RIGHT.
MR. DOWNEY: AND YOU THOUGHT THAT THE SHARES WERE PROBABLY WORTH ABOUT ANOTHER $4 A SHARE, CORRECT, POTENTIALLY?
ALAN EISENMAN: I DIDN'T KNOW WHAT THEY WERE WORTH. I DIDN'T HAVE ANY INFORMATION TO BASE A RATIONAL DECISION.
MR. DOWNEY: OKAY. BUT YOU TOLD THERANOS THAT YOU HAD HEARD THERE WAS A, QUOTE-UNQUOTE, "POST-MONEY ROUND AT $19;" CORRECT?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: WHAT DOES THAT MEAN "A POST-MONEY ROUND AT $19"?
ALAN EISENMAN: THAT MEANS THEY'VE RAISED MONEY FROM OTHER INSTITUTIONS AT $19 PER SHARE.
MR. DOWNEY: OKAY. SO YOU WERE SAYING I MIGHT WANT $19 A SHARE, TOO; RIGHT?
ALAN EISENMAN: I DON'T RECALL WHAT I WAS SAYING.
MR. DOWNEY: OKAY. BUT IF YOU WERE TO GET $19 A SHARE, YOU WOULD BE PAID -- INSTEAD OF BETWEEN $25 AND $30 MILLION FOR YOUR $1 MILLION INVESTMENT, YOU WOULD BE PAID SOMEWHERE BETWEEN $30 AND $35 MILLION; CORRECT?
ALAN EISENMAN: NO, THAT'S NOT A FAIR QUESTION BECAUSE IT DOESN'T MATTER WHAT YOU GET PAID, YOU MAKE A DECISION BASED ON FINANCIAL INFORMATION, AND THERE WAS NO FINANCIAL INFORMATION COMING FOR AN EXTENDED PERIOD OF TIME.
MR. DOWNEY: AND YOU WERE CONTACTING MR. BOIES ABOUT THIS BECAUSE HE WAS A LAWYER FOR THE COMPANY; CORRECT?
ALAN EISENMAN: HE CONTACTED ME FIRST, AND I WAS TRYING TO RESPOND.
MR. DOWNEY: FAIR ENOUGH. THE DIALOGUE THAT YOU WERE HAVING WITH MR. BOIES WAS IN HIS ROLE AS A LAWYER FOR THERANOS?
ALAN EISENMAN: WELL, HIS DAD WAS CHIEF COUNSEL. I DON'T KNOW WHAT CHRIS'S ROLE WAS. HE'S SON OF DAVID, BUT I DON'T KNOW IF HE HAD A ROLE WITH THE COMPANY OR IF THIS WAS JUST A ONE-OFF LEGAL MATTER FOR HIM TO HANDLE.
MR. DOWNEY: RIGHT. BUT YOUR UNDERSTANDING WAS THAT HE WAS REPRESENTING THERANOS IN SOME CAPACITY --
ALAN EISENMAN: YES, THAT'S FAIR.
MR. DOWNEY: -- IN YOUR DEALINGS WITH HIM? AND SO THAT TRANSACTION AT $15 A SHARE NEVER HAPPENED; CORRECT?
ALAN EISENMAN: AS I MENTIONED, THEY DROPPED THE BALL. THEY STOPPED COMMUNICATING.
MR. DOWNEY: OKAY. AND THEN ABOUT A MONTH AFTER THIS IN AUGUST, THIS IS FROM AUGUST OF 2015; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN ABOUT A MONTH LATER YOU WENT OUT TO SEE IF YOU COULD EVEN GET A BETTER OFFER FROM SOMEBODY ELSE, YOU WENT TO AN ENTITY CALLED SHARESPOST; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT EXHIBIT 13191.
ALAN EISENMAN: OKAY.
MR. DOWNEY: AND GO DOWN TO THE BOTTOM OF -- WELL, LET ME ASK YOU, THIS IS AN EMAIL EXCHANGE ABOUT YOUR THERANOS INVESTMENT WITH AN INDIVIDUAL FROM AN ENTITY CALLED SHARESPOST; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND WHAT IS SHARESPOST?
ALAN EISENMAN: MY UNDERSTANDING IS THAT IT'S A MARKET MAKER TO MATCH BUYERS AND SELLERS AND PRIVATE SECURITIES.
MR. DOWNEY: AND CAN YOU GIVE US MORE EXPLANATION ABOUT WHAT A MARKET MAKER IS?
ALAN EISENMAN: IF THERE'S AN ILLIQUID INVESTMENT, IT TRIES TO PUT TOGETHER BUYERS AND SELLERS, AND THEY TAKE A COMMISSION, AND THEY TRY TO MATCH BUYERS AND SELLERS.
MR. DOWNEY: SO AN INVESTMENT THAT IS IN A PRIVATE COMPANY LIKE THERANOS, THAT'S NOT TRADED ON THE NEW YORK STOCK EXCHANGE OR ANY STOCK EXCHANGE; CORRECT?
MR. DOWNEY: SO IF PEOPLE WHO HOLD SHARES IN THERANOS WANT TO SELL THEIR SHARES IN THERANOS, THEY HAVE TO FIND ON THEIR OWN SOMEONE TO SELL THOSE SHARES TO; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: BUT SHARESPOST IS AN ENTITY THAT SAYS, WELL, WE'LL DO THAT WORK FOR YOU, WE'LL FIND SOMEBODY WHO IS WILLING TO BUY YOUR SHARES AT A CERTAIN PRICE, AND THEN YOU CAN DECIDE WHETHER YOU WANT TO SELL THE SHARES OR NOT; RIGHT?
ALAN EISENMAN: I DON'T RECALL IF IT'S A SOLID COMMITMENT OR A LESS SOLID COMMITMENT.
MR. DOWNEY: OKAY. BUT THE GIST OF IT IS THAT THEY LOOK FOR POTENTIAL BUYERS; CORRECT?
ALAN EISENMAN: THEY MATCH BUYERS AND SELLERS AND THEY TAKE A COMMISSION.
MR. DOWNEY: RIGHT. AND IN THIS INSTANCE YOU WERE A SELLER; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND YOU WERE COMMUNICATING TO -- WITH THE REPRESENTATIVE OF SHARESPOST IN EXHIBIT 13191 TO DETERMINE HOW MUCH YOUR INVESTMENT IN THERANOS MIGHT BE WORTH; RIGHT?
ALAN EISENMAN: I WAS DETERMINING WHAT THE MARKET WAS WORTH AND WHAT SOMEONE MIGHT PAY FOR MY SHARES.
MR. DOWNEY: YOUR HONOR, I MOVE THE ADMISSION OF 13191.
MR. BOSTIC: 401. BEYOND THE SCOPE.
JUDGE DAVILA: I'LL ALLOW IT. IT'S ADMITTED OVER OBJECTION.
(DEFENDANT'S EXHIBIT 13191 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: I WANT TO DIRECT YOUR ATTENTION TO AN EMAIL ON THE BOTTOM OF THE PAGE, AND THIS IS AN EMAIL TO YOU FROM SOMEONE AT SHARESPOST; CORRECT?
ALAN EISENMAN: I'M SORRY, WHAT IS THE QUESTION?
MR. DOWNEY: THE EMAIL THAT WE'RE LOOKING AT ON THE SCREEN, WHICH IS THE BOTTOM EMAIL ON PAGE 1 OF THE EMAIL, IS AN EMAIL FROM SHARESPOST TO YOU; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND IN THIS EMAIL HE'S PROVIDING THE INFORMATION ABOUT THE PRICE AT WHICH SHARESPOST HAS BEEN ABLE TO SET UP TRANSACTIONS IN THERANOS STOCK; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND HE TELLS YOU THAT THEY WERE ABLE TO DO A TRANSACTION AT SOME POINT IN 2015 WHERE INVESTORS IN THERANOS SOLD THEIR STOCK AT $14.75 A SHARE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THAT BUYERS BOUGHT AT THAT PRICE; CORRECT?
ALAN EISENMAN: AGAIN, THERE'S A COMMISSION. SO I DON'T KNOW WHAT THE PRICE WAS ON EITHER SIDE, BUT THERE WAS A DIFFERENCE.
MR. DOWNEY: FAIR ENOUGH. THERE MIGHT BE A MARGINAL DIFFERENCE FROM THE 14.75 PRICE; RIGHT?
ALAN EISENMAN: RIGHT.
MR. DOWNEY: AND THAT'S THE KIND OF INFORMATION THAT YOU WERE SEEKING FROM HIM. SO IF I WENT OUT TO GO AND TRY TO SELL MY SHARES ON THESE MARKETS, WHAT COULD I GET FROM THEM; RIGHT?
ALAN EISENMAN: RIGHT.
MR. DOWNEY: AND YOU WOULD AGREE WITH ME THAT IF YOU SOLD YOUR SHARES AT $14.75 A SHARE, THAT YOUR MILLION DOLLAR INVESTMENT IN THERANOS WOULD HAVE TURNED INTO -- YOU'RE PROBABLY BETTER AT THE MATH THAN I AM -- BUT SOMEWHERE BETWEEN $20 AND $25 MILLION?
ALAN EISENMAN: HOW IS THAT RELEVANT?
MR. DOWNEY: WELL, DO YOU AGREE WITH ME?
ALAN EISENMAN: YES.
MR. DOWNEY: THE MATH IS GENERALLY RIGHT; RIGHT? WE CAN AGREE ON THE MATH?
ALAN EISENMAN: OKAY.
JUDGE DAVILA: YOU CAN ASK ANOTHER QUESTION.
BY MR. DOWNEY:
MR. DOWNEY: LET ME ASK YOU TO GO TO THE EMAIL ABOVE THAT. YOU RESPOND AND YOU SAY YOU GOT INFORMATION FROM ANOTHER INDIVIDUAL AT SHARESPOST; CORRECT? THAT'S GENO?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THAT HE TOLD YOU THAT CURRENT TRANSACTIONS WERE SELLING IN THE $17 TO $19 PRICE RANGE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN IF YOU GO TO THE EMAIL ABOVE THAT HE SAID TO YOU THAT HE HAD RETURNED FROM A LONG VACATION AND THAT HE WOULD BE ABLE TO DISCUSS WITH YOU; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND THEN YOU EMAILED HIM BACK AND TOLD HIM THAT YOU NEED ACCURATE INFORMATION; RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THEN IN THE LAST SENTENCE OF THAT YOU ASKED IS THE MARKET LIQUID ENOUGH TO ABSORB $10 MILLION WITHOUT LOWERING MY PRICE. DO YOU SEE THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND IS THAT, IS THAT QUESTION BY YOU AS TO WHETHER YOU COULD SELL THE FIRST $10 MILLION OF YOUR SHARES WITHOUT IT RESULTING IN THAT $14.75 PRICE BEING REDUCED?
ALAN EISENMAN: I DON'T HAVE ENOUGH INFORMATION TO ANSWER THAT QUESTION.
MR. DOWNEY: OKAY. WELL, I'M JUST ASKING IN THIS EMAIL YOU PREPARED HERE, WHAT IS -- WHAT DO YOU MEAN BY IS THE MARKET LIQUID ENOUGH TO ABSORB $10 MILLION WITHOUT LOWERING MY PRICE?
ALAN EISENMAN: IT WAS JUST AN EXPLORATORY QUESTION TO SEE HOW LIQUID THE MARKET WAS.
MR. DOWNEY: OKAY. AND DID YOU GET INFORMATION AS TO WHAT WOULD HAPPEN TO THE PRICE IF YOU SOLD $10 MILLION OR TRIED TO SELL $10 MILLION AT $14.75 A SHARE?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. NOW, DURING THIS WINDOW BOTH PRIOR TO YOUR 2013 INVESTMENT AND AFTER YOUR 2013 INVESTMENT, AM I RIGHT THAT YOU WERE HUNGRY FOR INFORMATION ABOUT THERANOS; IS THAT RIGHT?
ALAN EISENMAN: I WAS SEEKING INFORMATION.
MR. DOWNEY: RIGHT. AND YOU WANTED TO KNOW ANY INFORMATION YOU COULD ABOUT THERANOS; IS THAT RIGHT?
ALAN EISENMAN: I WAS SEEKING INFORMATION.
MR. DOWNEY: OKAY. SO AM I RIGHT THAT IF THERE WERE NEWSPAPER ARTICLES OR ONLINE MAGAZINE ARTICLES OR SO FORTH, YOU READ THOSE?
ALAN EISENMAN: I READ SOME OF THEM.
MR. DOWNEY: OKAY. WHY DID YOU ONLY READ SOME OF THEM WHEN YOU WERE EAGER FOR INFORMATION ABOUT THERANOS?
ALAN EISENMAN: BECAUSE THERE WAS A TREMENDOUS VOLUME OF INFORMATION ABOUT THERANOS.
MR. DOWNEY: OKAY.
ALAN EISENMAN: AND IT WOULD HAVE BEEN DIFFICULT TO READ EVERY PIECE OF INFORMATION THAT WAS PUBLISHED.
MR. DOWNEY: OKAY. WELL, YOU KNEW THAT THERANOS HAD ALSO PUT UP A WEBSITE; CORRECT?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND AM I RIGHT THAT AS AN INVESTOR IN THE COMPANY THAT WAS EAGER TO UNDERSTAND THE COMPANY, YOU REVIEWED THAT WEBSITE?
ALAN EISENMAN: YES.
MR. DOWNEY: FROM TOP TO BOTTOM?
ALAN EISENMAN: I CAN'T SAY FROM TOP TO BOTTOM, BUT I REVIEWED THE WEBSITE.
MR. DOWNEY: OKAY. AND YOU KNEW THAT WALGREENS -- YOU KNEW AT SOME POINT THAT WALGREENS WAS THE PARTNER WITH WHOM WALGREENS -- WELL, THERANOS WAS LAUNCHING TESTING SERVICES; RIGHT?
ALAN EISENMAN: RIGHT.
MR. DOWNEY: AND DID YOU REVIEW WALGREENS'S ANNOUNCEMENT ABOUT THEIR PARTNERSHIP WITH THERANOS?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. DID YOU REVIEW THE WALGREENS WEBSITE WITH RESPECT TO THE PORTIONS OF THE WALGREENS WEBSITE THAT TALKED ABOUT THE THERANOS SERVICES OFFERED IN THEIR STORES?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. WHEN THERANOS AND WALGREENS MADE AN ANNOUNCEMENT OF THEIR JOINT PROJECT OF OFFERING BLOOD TESTING SERVICES, DID YOU SEE IF THEY HAD ISSUED TOGETHER A PRESS RELEASE?
ALAN EISENMAN: I READ THE PUBLICITY AT THE TIME, BUT I DON'T RECALL IF IT WAS JOINED OR IF IT WAS FROM THERANOS.
MR. DOWNEY: OKAY. WHATEVER THE ANNOUNCEMENTS WERE OF IT, YOU'RE CONFIDENT THAT YOU READ IT; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: OKAY. NOW, I WANT TO ASK YOU, AS A FINAL SUBJECT, ABOUT SOME COMMUNICATIONS THAT YOU HAD WITH THE PROSECUTION TEAM IN THIS MATTER BEYOND THE ONES THAT WE TALKED ABOUT EARLIER. FIRST OF ALL, WILL YOU TELL US, HOW MANY TIMES HAVE YOU MET WITH REPRESENTATIVES OF THE GOVERNMENT IN CONNECTION WITH YOUR TESTIMONY HERE TODAY?
ALAN EISENMAN: I'M SORRY, I -- HOW MANY TIMES HAVE I MET SINCE?
MR. DOWNEY: WELL, HOW MANY TIMES -- AT SOME POINT YOU BEGAN MEETING WITH LAWYERS AND AGENTS FROM THE GOVERNMENT; CORRECT?
ALAN EISENMAN: THE FIRST PERSONAL MEETING WAS BEFORE I CAME TO SAN JOSE FOR MY FIRST TESTIMONY.
MR. DOWNEY: OKAY. AND SINCE THAT MEETING, HOW MANY OTHER MEETINGS HAVE YOU HAD WITH THE GOVERNMENT IN CONNECTION WITH THE THERANOS MATTERS?
ALAN EISENMAN: REALLY NONE WHERE THERE'S BEEN ANYTHING SUBSTANTIVE DISCUSSED.
MR. DOWNEY: OKAY. WELL, LET ME ASK YOU TO LOOK AT -- DO YOU ACKNOWLEDGE THAT YOU'VE HAD SOME MEETINGS WITH THE GOVERNMENT?
ALAN EISENMAN: I ACKNOWLEDGE THAT WE HAVE -- I DON'T KNOW IF YOU WOULD CALL THEM MEETINGS, BUT WE HAVE SEEN EACH OTHER AND BEEN DIRECTED TO THE CONFERENCE ROOM AND -- YEAH.
MR. DOWNEY: WELL, WHEN YOU'VE SEEN EACH OTHER AND DIRECTED TO THE CONFERENCE ROOM, DID YOU GO INTO THE CONFERENCE ROOM AND DISCUSS MATTERS RELATED TO YOUR INVESTMENTS IN THERANOS?
ALAN EISENMAN: MY RECOLLECTION IS NO.
MR. DOWNEY: SO YOU'VE NEVER HAD A MEETING WITH THE GOVERNMENT WHERE YOU DISCUSSED YOUR INVESTMENT WITH THERANOS?
ALAN EISENMAN: AS I MENTIONED EARLIER, I HAD A MEETING WITH THEM BEFORE MY FIRST PROPOSED TESTIMONY.
MR. DOWNEY: OKAY. AND WHERE WAS YOUR FIRST PROPOSED TESTIMONY? YOU MEAN DURING THE COURSE OF THIS TRIAL?
ALAN EISENMAN: WELL, IT WAS SUPPOSED TO BE HERE, THE FIRST TIME THAT I WAS CALLED, BECAUSE WITNESSES RAN OVER. I NEVER TESTIFIED THE FIRST TIM THAT I WAS ASKED TO COME TO SAN JOSE.
MR. DOWNEY: I SEE. YOU'RE TALKING ABOUT YOUR TESTIMONY IN THIS MATTER IN THIS TRIAL?
ALAN EISENMAN: YES, YES.
MR. DOWNEY: OKAY, OKAY. BUT OTHER THAN THAT, YOU DON'T RECALL ANY SUCH MEETINGS?
ALAN EISENMAN: NOT IN-PERSON MEETINGS. IS THAT WHAT YOU'RE REFERRING TO?
MR. DOWNEY: WELL, HAD YOU HAD TELEPHONIC MEETINGS? I THOUGHT YOU SAID HE SAW THEM AND THEY DIRECTED YOU INTO A CONFERENCE ROOM?
ALAN EISENMAN: YEAH, THERE WERE TELEPHONIC MEETINGS.
MR. DOWNEY: OKAY. HOW MANY TELEPHONIC MEETINGS DID YOU HAVE WITH THE GOVERNMENT ABOUT YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: I DON'T RECALL. I WOULD GUESS MAYBE TWO OR THREE.
MR. DOWNEY: WELL, DIDN'T YOU TESTIFY WAY BACK IN 2019 THAT YOU HAD ALREADY MET WITH THE GOVERNMENT SIX TO TEN TIMES?
ALAN EISENMAN: I'M SORRY, I DON'T FOLLOW YOUR QUESTION.
MR. DOWNEY: WELL, YOU JUST TOLD ME THAT YOU MET WITH THE GOVERNMENT IN CONNECTION WITH YOUR INVESTMENT IN THERANOS TWO OR THREE TIMES. DO YOU REMEMBER SAYING THAT A MOMENT AGO?
ALAN EISENMAN: LET ME GO BACK. I'M A LITTLE BIT UNCLEAR ON WHAT YOU'RE ASKING ME. I CAME HERE TO TESTIFY AND HAVE A MEETING.
MR. DOWNEY: I THINK WE'RE NOT UNDERSTANDING EACH OTHER. I AM ASKING YOU HOW MANY MEETINGS YOU HAVE HAD WITH THE GOVERNMENT ABOUT YOUR INVESTMENT IN THERANOS?
ALAN EISENMAN: OKAY. IS YOUR QUESTION ABOUT MEETINGS OVER THE TELEPHONE?
MR. DOWNEY: TELEPHONIC MEETINGS, IN-PERSON MEETINGS, MEETINGS WHERE THEY DIRECTED YOU TO THE CONFERENCE ROOM?
ALAN EISENMAN: OKAY. I DON'T RECALL THE NUMBER.
MR. DOWNEY: IT'S MORE THAN TEN, ISN'T IT?
ALAN EISENMAN: I CAN'T RECALL THE NUMBER.
MR. DOWNEY: OKAY. YOU CAN'T SAY WHETHER IT'S MORE THAN TEN?
ALAN EISENMAN: I DON'T RECALL.
MR. DOWNEY: OKAY. IS IT MORE THAN TWO?
ALAN EISENMAN: MOST LIKELY.
MR. DOWNEY: OKAY. BUT YOU DON'T HAVE AN ESTIMATE OF SOMEWHERE BETWEEN TWO AND TEN?
ALAN EISENMAN: I DON'T.
MR. DOWNEY: OKAY. AND DO YOU ACKNOWLEDGE THAT YOU'VE BEEN IN REGULAR TOUCH WITH MEMBERS OF THE PROSECUTION TEAM AND FBI AGENTS ABOUT THERANOS?
ALAN EISENMAN: MY RECOLLECTION IS THAT IT'S NOT -- IT HAS NOT BEEN REGULAR COMMUNICATION. THERE HAS BEEN SOME IRREGULAR, AND AS I MENTIONED EARLIER, I CAN'T, I CAN'T TELL YOU HOW MANY TIMES THAT HAS BEEN.
MR. DOWNEY: AND WHAT DO YOU MEAN WHEN YOU SAY "IRREGULAR"?
ALAN EISENMAN: THERE HAVE BEEN SOME COMMUNICATIONS OVER A PERIOD AND, AGAIN, EVERYTHING SORT OF RUNS TOGETHER. IT COULD BE OVER THE LAST ONE YEAR OR TWO YEARS. I DON'T RECALL. BUT THERE HAVE BEEN COMMUNICATIONS THAT HAVE BEEN OVER THE LAST YEAR OR TWO, GIVE OR TAKE, AND I CANNOT TELL YOU HOW MANY COMMUNICATIONS THERE HAVE BEEN.
MR. DOWNEY: OKAY. AND IS IT FAIR TO SAY THAT AS A RESULT OF THOSE COMMUNICATIONS, YOU'VE DEVELOPED A RELATIONSHIP WITH SOME OF THE AGENTS IN THE CASE?
ALAN EISENMAN: NO, THAT'S NOT FAIR TO SAY. I HAD NO RELATIONSHIP WITH THE AGENTS IN THE CASE.
MR. DOWNEY: OKAY. LET ME ASK YOU TO LOOK AT EXHIBIT 14109.
(PAUSE IN PROCEEDINGS.)
BY MR. DOWNEY:
MR. DOWNEY: DO YOU RECOGNIZE EXHIBIT 14109 AS AN EMAIL EXCHANGE BETWEEN YOURSELF AND AGENT HERNANDEZ?
ALAN EISENMAN: YES.
MR. DOWNEY: AND THE SUBJECT OF THE COMMUNICATIONS RELATES TO MATTERS RELATED TO YOUR TESTIMONY TODAY; CORRECT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND YOU WERE SENDING HER, AS PART OF THESE COMMUNICATIONS, YOU SENT AGENT HERNANDEZ A PERSONAL COMPUTER OF YOURS; CORRECT?
ALAN EISENMAN: I SENT A HARD DRIVE THAT WAS CORRUPTED THAT HAD POTENTIALLY EMAILS REGARDING THERANOS THAT ALSO HAD FAMILY PICTURES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT EXHIBIT 14109.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(DEFENDANT'S EXHIBIT 14109 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND I'D DIRECT YOU TO THE LAST SENTENCE AND ASK YOU IF THAT'S AN ACCURATE STATEMENT OF YOUR FEELING IN CONNECTION WITH THE PROSECUTION TEAM IN THIS MATTER?
ALAN EISENMAN: IT'S A LITTLE MISLEADING. WHAT THAT IS, IS THAT WE ARE ON THE SAME PAGE, AND I FEEL LIKE I WAS LIED TO AND CHEATED FROM THE COMPANY.
MR. DOWNEY: WELL, IS IT AN ACCURATE STATEMENT OF YOUR FEELING TOWARDS THE PROSECUTION TEAM THAT YOU ARE A FAITHFUL PART OF THEIR TEAM?
ALAN EISENMAN: AGAIN, THAT'S A LITTLE MISLEADING. IF YOU'LL ALLOW ME TO ELABORATE.
MR. DOWNEY: WELL, I JUST WANT TO KNOW WHETHER IT'S AN ACCURATE STATEMENT OR NOT AN ACCURATE STATEMENT. I'M NOT REALLY LOOKING FOR YOU TO ELABORATE. IF IT'S NOT AN ACCURATE STATEMENT, THAT'S FINE.
ALAN EISENMAN: IT'S SUBJECTIVE, AND I WAS TRYING TO CLARIFY.
MR. DOWNEY: SO IT'S NOT AN ACCURATE STATEMENT, IS THAT WHAT YOU'RE SAYING, OR THE WAY I'VE ASKED THE QUESTION IS NOT ACCURATE?
MR. BOSTIC: YOUR HONOR, I'D ASK THAT THE WITNESS BE ALLOWED TO ANSWER THE QUESTION.
JUDGE DAVILA: HE HADN'T FINISHED HIS ANSWER.
MR. DOWNEY: I BEG YOUR PARDON.
ALAN EISENMAN: OKAY. FAITHFUL IS A SUBJECTIVE CLAUSE. I'LL BE MORE OBJECTIVE. I THINK THERE WAS BUSINESS FRAUD. I THINK THAT I WAS LIED TO AND TAKEN ADVANTAGE OF. I THINK THAT THERE WAS A LOT OF ABUSE THROUGH THE YEARS, AND I WOULD DO WHAT I CAN TO TELL MY STORY, AND I KNOW THAT WE, WE HAVE THE SAME OUTCOME, THAT JUSTICE BE SERVED.
BY MR. DOWNEY:
MR. DOWNEY: IN FACT, IT'S NOT JUST YOUR INVESTMENT IN THERANOS THAT YOU'RE A FAITHFUL MEMBER OF THE TEAM WITH RESPECT TO THE LAWYERS AND AGENTS IN THIS CASE; IS THAT RIGHT?
ALAN EISENMAN: I'M SORRY?
MR. DOWNEY: WELL, YOU HAVE ASKED THE AGENTS AND LAWYERS IN THIS CASE TO INVESTIGATE OTHER INVESTMENTS YOU MADE WHERE YOU LOST MONEY ON THE INVESTMENTS; ISN'T THAT RIGHT?
MR. BOSTIC: YOUR HONOR, I WOULD OBJECT UNDER 401 AND 403.
JUDGE DAVILA: I WILL SUSTAIN THE OBJECTION.
MR. DOWNEY: ALL RIGHT. I'M HAPPY TO MAKE A SHOWING. I WOULD OFFER IT AS ONLY GOING TO HIS BIAS. HE HAS THAT TO CONDUCT --
ALAN EISENMAN: I HAVE NO BIAS IN THIS CASE.
JUDGE DAVILA: SIR, SIR, THERE'S NO QUESTION PENDING. THAT'S STRICKEN. THAT'S STRICKEN.
ALAN EISENMAN: OKAY.
(PAUSE IN PROCEEDINGS.)
MR. DOWNEY: I THINK WITH THAT, YOUR HONOR, I MIGHT BE DONE. MAY I HAVE JUST ONE MOMENT?
JUDGE DAVILA: SURE. OF COURSE.
(DISCUSSION AMONGST DEFENSE COUNSEL OFF THE RECORD.)
MR. DOWNEY: YOUR HONOR, SUBJECT TO THE OTHER DISCUSSION THAT WE HAD, THAT CONCLUDES ANY FURTHER QUESTIONS ON THE CROSS-EXAMINATION.
JUDGE DAVILA: ALL RIGHT. THANK YOU. MR. BOSTIC, ANY REDIRECT?
MR. BOSTIC: YES, YOUR HONOR.
REDIRECT EXAMINATION BY MR. BOSTIC:
MR. BOSTIC: GOOD AFTERNOON, MR. EISENMAN.
ALAN EISENMAN: GOOD AFTERNOON.
MR. BOSTIC: I JUST WANT TO ASK YOU A FEW QUESTIONS FOLLOWING UP ON YOUR CONVERSATION WITH MR. DOWNEY.
ALAN EISENMAN: I'M SORRY, MR. WHO?
MR. BOSTIC: MR. DOWNEY, DEFENSE COUNSEL.
ALAN EISENMAN: OH, I AM SORRY. I APOLOGIZE.
MR. BOSTIC: FIRST, DO YOU RECALL A CONVERSATION WITH MR. DOWNEY ABOUT SOME OF THE PROVISIONS IN THE CONTRACT THAT YOU SIGNED WHEN YOU INVESTED IN THERANOS?
ALAN EISENMAN: I'M SORRY, I'M -- COULD YOU ASK THE QUESTION AGAIN?
MR. BOSTIC: YES. DO YOU RECALL DISCUSSING WITH MR. DOWNEY SOME OF THE LANGUAGE IN THE CONTRACTS THAT YOU SIGNED WHEN YOU INVESTED IN THERANOS?
ALAN EISENMAN: YES, I DO.
MR. BOSTIC: AND DO YOU RECALL THAT THOSE CONTRACTS HAD LANGUAGE ABOUT PROJECTIONS BEING SPECULATIVE IN NATURE?
ALAN EISENMAN: YES.
MR. BOSTIC: AS AN INVESTOR IN THERANOS AND IN OTHER COMPANIES, ARE YOU FAMILIAR WITH THE IDEA OF A COMPANY PROVIDING PROJECTIONS TO POTENTIAL INVESTORS?
ALAN EISENMAN: YES, I AM.
MR. BOSTIC: DO YOU KNOW THE DIFFERENCE BETWEEN PROJECTIONS THAT ARE FORWARD LOOKING AND PRESENT TENSE REPRESENTATIONS ABOUT WHAT THE COMPANY CAN DO?
ALAN EISENMAN: YES.
MR. BOSTIC: IN YOUR CONVERSATIONS WITH MS. HOLMES, DID YOU GET BOTH OF THOSE? DID YOU GET BOTH FORWARD LOOKING PROJECTIONS BUT ALSO PRESENT TENSE STATEMENTS ABOUT WHAT THE COMPANY HAD DONE AND WAS DOING?
ALAN EISENMAN: YES, I DID.
MR. BOSTIC: YOU TESTIFIED ON DIRECT ABOUT INFORMATION THAT MS. HOLMES HAD GIVEN YOU RELATING TO HOW WELL THE THERANOS TECHNOLOGY WORKED; IS THAT CORRECT?
ALAN EISENMAN: THAT'S CORRECT.
MR. BOSTIC: IN THOSE CONVERSATIONS DID SHE COMPARE THE THERANOS TECHNOLOGY TO TECHNOLOGY USED BY QUEST AND LABCORP?
ALAN EISENMAN: SHE DID.
MR. BOSTIC: AND WHAT DID SHE SAY IN THAT REGARD?
ALAN EISENMAN: BASICALLY THAT, THAT THOSE COMPANIES WOULD BECOME OBSOLETE, THAT THERANOS'S TECHNOLOGY WAS A SMALLER DRAW OF BLOOD, COULD DO MORE TESTS, AND COULD HAVE RESULTS BACK IN A MUCH QUICKER PERIOD OF TIME. AND ONE YEAR AFTER WE INVESTED, IN THE ANNUAL MEETING SHE SAID THAT THE TECHNOLOGY NOT ONLY TOOK A SNAPSHOT, BUT IT BASICALLY TOOK A MOVIE OF WHAT WAS HAPPENING IN YOUR BLOOD, WHICH WOULD BE GOOD FOR ADVERSE DRUG REACTIONS, FOR DRUG DOSING, AND THAT AT THAT SAME MEETING THERE WAS ALSO SOME MENTION THAT BRISTOL MYERS HAD DONE SIX CLINICAL TRIALS WITH THE LATEST ITERATION OF THEIR TECHNOLOGY AND THEY WERE LIKE A 747, FLAWLESS.
MR. BOSTIC: WHEN MS. HOLMES COMPARED THE PERFORMANCE OF THERANOS TECHNOLOGY TO CONVENTIONAL TECHNOLOGY, WAS SHE MAKING PROJECTIONS ABOUT WHAT WOULD BE POSSIBLE IN THE FUTURE, OR WAS SHE TELLING YOU WHAT THE TECHNOLOGY COULD DO IN THAT MOMENT?
ALAN EISENMAN: WHAT THE TECHNOLOGY COULD DO IN THAT MOMENT.
MR. BOSTIC: AND DID YOU RELY ON THOSE PRESENT TENSE REPRESENTATIONS IN DECIDING TO INVEST IN THE COMPANY IN 2013?
ALAN EISENMAN: YES, I DID.
MR. BOSTIC: DO YOU RECALL THAT DURING YOUR TESTIMONY WE'VE LOOKED AT SOME TEXT FROM A NEWS ARTICLE DISCUSSING WHAT THERANOS COULD DO AND THE CAPABILITIES OF ITS TECHNOLOGY?
ALAN EISENMAN: CAN YOU REFRESH MY MEMORY? WHAT YEAR WAS THE ARTICLE AND WHAT WAS THE SOURCE?
MR. BOSTIC: COULD I DIRECT YOU TO THE WHITE BINDER --
ALAN EISENMAN: I DON'T HAVE A WHITE ONE. I HAVE A BLACK ONE.
MR. BOSTIC: I'M SORRY. THIS IS IN EVIDENCE. MAYBE WE CAN JUST PUBLISH IT. IT'S 1106 IN EVIDENCE ALREADY.
MR. DOWNEY: YOUR HONOR, I DON'T THINK I ASKED ABOUT THIS ON THE CROSS-EXAMINATION.
MR. BOSTIC: YOUR HONOR, THIS IS STILL IN THE SUBJECT OF PROJECTIONS VERSUS PRESENT TERMS STATEMENTS.
JUDGE DAVILA: I'LL ALLOW EXAMINATION ON THIS.
BY MR. BOSTIC:
MR. BOSTIC: IF WE CAN ZOOM IN ON THE FIRST INDENTED PARAGRAPH. MR. EISENMAN, DO YOU RECALL READING THIS PUBLICATION OR THIS ARTICLE BEFORE YOU DECIDED TO INVEST IN 2013?
ALAN EISENMAN: YES.
MR. BOSTIC: WERE YOU AWARE AT THE TIME THAT MS. HOLMES HAD REVIEWED OR HAD THE OPPORTUNITY TO REVIEW A DRAFT OF THIS ARTICLE BEFORE IT WAS PUBLISHED?
ALAN EISENMAN: I WAS NOT AWARE THAT SHE REVIEWED A DRAFT OF THIS ARTICLE BEFORE IT WAS PUBLISHED.
MR. BOSTIC: IN THE TEXT HIGHLIGHTED ON THE SCREEN THERE, THERE'S A LINE THAT SAYS, "THERANOS'S PROCESSES ARE FASTER, CHEAPER, AND MORE ACCURATE THAN THE CONVENTIONAL METHODS AND REQUIRE ONLY MICROSCOPIC BLOOD VOLUMES, NOT VIAL AFTER VIAL OF THE STUFF." DO YOU SEE THAT LANGUAGE?
ALAN EISENMAN: I DO.
MR. BOSTIC: AS AN INVESTOR, DO YOU INTERPRET THAT LANGUAGE TO BE A PROJECTION THAT MIGHT BE SPECULATIVE, OR DOES IT REFER TO THE PRESENT TENSE CAPABILITIES OF THE TECHNOLOGY?
ALAN EISENMAN: THAT REFERS TO THE PRESENT TENSE.
MR. BOSTIC: OKAY. WE CAN PUT THAT ASIDE. THANK YOU, MS. HOLLIMAN. THERE WAS SOME DISCUSSION DURING CROSS-EXAMINATION ABOUT YOUR REPEATED ATTEMPTS TO GET INFORMATION FROM THE COMPANY. DO YOU REMEMBER THAT?
ALAN EISENMAN: YES.
MR. BOSTIC: AND THERE WAS A DISCUSSION DURING THAT CONVERSATION AS TO WHETHER YOU UNDERSTOOD THAT THERANOS COULDN'T GIVE YOU SPECIAL INFORMATION NOT GIVEN TO OTHER INVESTORS. DID YOU UNDERSTAND THAT AT THE TIME?
ALAN EISENMAN: YES.
MR. BOSTIC: AND IS THAT WHAT YOU WERE ASKING FOR? WERE YOU ASKING FOR INFORMATION TO BE EXCLUSIVELY SHARED WITH YOU AND NOT PROVIDED TO OTHER INVESTORS?
MR. BOSTIC: HOW ABOUT YOUR GROUP? THERE WAS SOME REFERENCE TO OTHER INVESTORS THAT YOU WERE ASSOCIATED WITH. DO YOU RECALL THAT DISCUSSION?
ALAN EISENMAN: YES.
MR. BOSTIC: AND WERE YOU ASKING FOR INFORMATION TO BE SHARED ONLY WITH THAT GROUP TO THE EXCLUSION OF OTHER INVESTORS?
ALAN EISENMAN: YES.
MR. BOSTIC: LET ME ASK THAT AGAIN. IS WHAT YOU WANTED FOR YOUR GROUP ONLY TO GET INFORMATION AND THAT THAT INFORMATION WOULD NOT BE SHARED WITH OTHER INVESTORS?
ALAN EISENMAN: WHEN I REQUESTED INFORMATION MOST OF THE TIME IT WAS FOR ME PERSONALLY. THERE WERE A FEW INSTANCES WHEN INFORMATION WAS REQUESTED AND IT WAS SHARED AMONG THE SMALL GROUP THAT INVESTED TOGETHER IN 2006.
MR. BOSTIC: IN ASKING FOR INFORMATION FROM THE COMPANY, WERE YOU TRYING TO PUT YOURSELF OR YOUR GROUP AT AN ADVANTAGE COMPARED TO OTHER INVESTORS IN THE COMPANY?
MR. BOSTIC: IF THE COMPANY HAD PROVIDED THE INFORMATION THAT YOU WERE ASKING FOR TO ALL OF THE INVESTORS, WOULD THAT HAVE SATISFIED YOU?
ALAN EISENMAN: YES.
MR. BOSTIC: MR. DOWNEY ALSO ASKED YOU ABOUT OTHER INVESTORS WHO INVESTED IN THERANOS BETWEEN 2010 AND 2013. DO YOU RECALL THAT DISCUSSION?
ALAN EISENMAN: YES.
MR. BOSTIC: DO YOU KNOW WHETHER THOSE INVESTORS WERE PROVIDED ANY INFORMATION BY THE COMPANY IN CONNECTION WITH THEIR INVESTMENTS?
ALAN EISENMAN: WE HEARD THAT THERE WAS MONEY -- I'M SORRY, THAT THERE WAS INFORMATION PROVIDED TO OTHER LARGER INSTITUTIONAL INVESTORS, AND WE CONTACTED THE COMPANY TO CONFIRM IF FINANCIAL INFORMATION WAS SHARED, AND IF SO, IF THEY COULD SHARE IT WITH US. AND WE NEVER GOT AN ADEQUATE RESPONSE FROM THE COMPANY.
MR. BOSTIC: WERE YOU EVER GIVEN INFORMATION BY MS. HOLMES OR THE COMPANY THAT YOU WERE TOLD HAD BEEN PROVIDED TO THOSE OTHER INVESTORS DURING THAT 2010, 2013 TIMEFRAME?
ALAN EISENMAN: NO, WE WEREN'T.
MR. BOSTIC: YOU UNDERSTOOD AT THE TIME THAT YOU WERE HAVING THESE COMMUNICATIONS WITH MS. HOLMES THAT YOU HAD NO LEGAL RIGHT TO ADDITIONAL INFORMATION; IS THAT RIGHT?
ALAN EISENMAN: I UNDERSTOOD THAT, YES.
MR. BOSTIC: IF YOU UNDERSTOOD THAT AT THE TIME, WHY DID YOU KEEP ASKING? IF YOU WEREN'T INVOKING CONTRACTUAL OR LEGAL RIGHT, WHY DID YOU KEEP ASKING FOR MORE INFORMATION?
ALAN EISENMAN: BECAUSE AS A PRACTICAL MATTER WE MAKE INVESTMENTS IN A LOT OF PRIVATE COMPANIES, AND THIS WAS THE EXCEPTION, THE COMPANY THAT WOULD NOT SPEAK TO US. AND BECAUSE WE HAD A SIGNIFICANT INVESTMENT, IT'S LOGICAL THAT THERE WOULD BE AT LEAST A MINIMAL AMOUNT OF COMMUNICATION, SOME INDICATION ON HOW THE COMPANY IS DOING, OR HOW OUR INVESTMENT IS DOING WITHOUT VIOLATING ANYTHING THAT IS CONFIDENTIAL. AND IF THERE IS CONFIDENTIAL INFORMATION, I HAVE SIGNED A NONDISCLOSURE AGREEMENT ON SEVERAL OCCASIONS WHERE COMPANIES ARE FREE TO GIVE ME THE INFORMATION THAT I REQUEST, AND I HAVE SWORN NOT TO SHARE THAT INFORMATION WITH ANYONE.
MR. BOSTIC: AND LET'S SEE. I'D LIKE TO TALK TO YOU NOW ABOUT A CONVERSATION THAT YOU HAD WITH MR. BALWANI BEFORE YOUR 2013 INVESTMENT. DO YOU RECALL THAT?
ALAN EISENMAN: YES, I DO.
MR. BOSTIC: FIRST OF ALL, YOU TOLD MR. DOWNEY THAT RIGHT AROUND THE TIME PERIOD OF THE 2013 INVESTMENT YOU WERE NOT IN DIRECT COMMUNICATION WITH MS. HOLMES; IS THAT RIGHT?
ALAN EISENMAN: THAT'S CORRECT.
MR. BOSTIC: HAD YOU HAD PREVIOUS CONVERSATIONS WITH MS. HOLMES ABOUT THE STATE OF THE TECHNOLOGY AND THE THINGS THAT THE COMPANY HAD PURPORTEDLY DONE?
ALAN EISENMAN: TO MY RECOLLECTION WE HAD QUARTERLY UPDATE CALLS FOR THE FIRST THREE OR FOUR YEARS AND MAYBE A SHORT CALL OR TWO IN THE INTERIM. BUT, YOU KNOW, AGAIN, MY ONLY STRONG RECOLLECTION WERE THOSE EARLY QUARTERLY CALLS THAT ENDED.
MR. BOSTIC: AND WERE THE FACTS OR THE CLAIMS THAT MS. HOLMES RELAYED TO YOU DURING THOSE EARLIER CALLS STILL IN YOUR MIND WHEN YOU MADE THE DECISION TO INVEST IN 2013?
ALAN EISENMAN: YES.
MR. BOSTIC: WERE YOU STILL RELYING ON THE CLAIMS THAT MS. HOLMES HAD MADE IN THE PAST WHEN YOU MADE THAT DECISION?
ALAN EISENMAN: NO. I WAS RELYING ON CURRENT INFORMATION.
MR. BOSTIC: AND WHAT WAS THE SOURCE OF THAT CURRENT INFORMATION?
ALAN EISENMAN: CURRENT INFORMATION WAS THE FINANCIAL PRESS, "THE WALL STREET JOURNAL" ARTICLE THAT YOU JUST PUT UP, THERE WERE ARTICLES IN SEVERAL CREDIBLE FINANCIAL PUBLICATIONS THAT THE TECHNOLOGY HAD WORKED. THERE WAS ALSO CONVERSATIONS THAT I, THAT I HAD DURING THE LEAD UP. FOR EXAMPLE, THERE WAS A CONFERENCE THAT BILL FRIST GAVE THE KEYNOTE SPEECH TO IN NASHVILLE, AND HE CLAIMED -- AND HE WAS A DIRECTOR OF THE COMPANY, SO I'M SURE HE GOT HIS INFORMATION FROM EXECUTIVES OF THE COMPANY. BUT AT THE TIME HE CLAIMED THAT THE TECHNOLOGY WORKED. YOU WOULD PUT THE BLOOD SAMPLE IN A READER, IT SENDS THE SIGNAL UP TO THE CLOUD, AND YOU GET QUICK RESULTS IN 30 MINUTES TO 2 HOURS, AND YOU HAVE QUICK ACCURATE RESULTS. HE ALSO SAID THAT IT HAD MILITARY APPLICATIONS. IT WAS BEING TESTED AND USED IN THE FIELD. SO THERE WAS A LOT OF INFORMATION THAT KIND OF RATIFIED A LOT OF THE POSITIVE INVESTMENT INFORMATION THAT I HAD IN THE PAST FROM A DIRECTOR OF THE COMPANY. SO I TOOK, BETWEEN THE FINANCIAL PUBLICATIONS, THE SHORT CONVERSATION I HAD WITH SUNNY BEFORE WE INVESTED, THE INVESTMENT CONFERENCE FROM SENATOR FRIST AND OTHER SOURCES, THAT IT WAS JUST A BARRAGE OF CREDIBLE INFORMATION THAT THEY HAD WHAT THEY CLAIMED THAT THEY HAD AND IT WAS WORKING AND IT WAS A HUGE MARKET.
MR. BOSTIC: AND WAS THAT INFORMATION THAT YOU WERE RECEIVING AT THE TIME CONSISTENT WITH THINGS THAT MS. HOLMES HAD TOLD YOU IN THE PAST?
ALAN EISENMAN: BECAUSE WE DIDN'T HAVE QUALITY CONVERSATIONS FOR A PERIOD OF YEARS, I CAN ONLY SAY THAT SHE SAID THINGS IN THE DISTANT PAST THAT BASICALLY THE TECHNOLOGY WAS WORKING, AND IT WAS WORKING IN THE MARKETPLACE, AND THERE WERE PHARMACEUTICAL COMPANIES THAT WERE USING IT IN TRIALS, AND IT HAD APPLICATIONS FOR BLOOD TESTING AND BLOOD DOSING, AND IT CONNECTED THE DOTS THAT MAYBE THE THINGS THAT SHE SAID EARLIER HERE, THERE WAS A PERIOD OF TIME WHERE THE COMPANY WAS MAYBE KIND OF STRUGGLING BUT IT LOOKS LIKE THEY KIND OF FOUND THEIR GAME AGAIN AND GAME WAS BACK ON.
MR. BOSTIC: AND THE THINGS THAT MS. HOLMES HAD TOLD YOU EARLIER ABOUT THE STATE OF THE TECHNOLOGY AND WHAT IT COULD DO, DID YOU ASSUME THAT THAT INFORMATION WAS ACCURATE AT THE TIME THAT YOU MADE YOUR 2013 INVESTMENT?
ALAN EISENMAN: YES, I DID.
MR. BOSTIC: THERE WAS SOME DISCUSSION WITH MR. DOWNEY ABOUT A CONVERSATION WITH MR. BALWANI AND WHETHER HE DISCOURAGED YOUR INVESTMENT IN 2013. DO YOU RECALL THAT DISCUSSION?
ALAN EISENMAN: YES.
MR. BOSTIC: AND JUST SO THE RECORD IS CLEAR, WHAT WAS MR. BALWANI'S ATTITUDE TOWARDS THE IDEA OF YOU INVESTING IN THERANOS IN 2013?
ALAN EISENMAN: IT WAS SURPRISINGLY POSITIVE.
MR. BOSTIC: AT ANY TIME DID HE ENCOURAGE YOU NOT TO INVEST OR NOT TO INVEST IN THE COMPANY?
ALAN EISENMAN: NO, HE DIDN'T.
MR. BOSTIC: THERE WAS A DISCUSSION OF AN EMAIL FROM JUNE OF 2010 WHERE MS. HOLMES TOLD YOU THAT THERANOS WAS AN EARLY STAGE LIFE SCIENCES COMPANY THAT CARRIED IMMENSE RISK. DO YOU RECALL SEEING THAT EMAIL?
ALAN EISENMAN: I DO.
MR. BOSTIC: SHE SAID IN THAT EMAIL THAT THE STATUS THERE MIGHT NOT CHANGE FOR YEARS TO COME. WHEN YOU MADE THE INVESTMENT IN 2013, DID YOU UNDERSTAND THAT THAT STATUS HAD CHANGED?
ALAN EISENMAN: YES.
MR. BOSTIC: HOW SO?
ALAN EISENMAN: WELL, AS I MENTIONED EARLIER, WHEN I GOT THAT EMAIL, THAT WAS NOT LOGICAL WITH ALL OF THE OTHER INFORMATION THAT HAD BEEN PASSED BEFORE; THAT THE COMPANY WAS SUCCESSFUL, THEY WERE GETTING CONTRACTS, THEY HAD DEMAND FOR A MILLION READERS GOING TO 2 MILLION -- I'M SORRY, GOING TO 2 MILLION CARTRIDGES A MONTH, THAT REVENUES WOULD BE IN THE HUNDREDS OF MILLIONS OF DOLLARS. SO THAT EMAIL CONTRADICTED ALL OF THE EARLIER INFORMATION THINKING THAT THEY WERE HITTING MILESTONES AND THEY WERE MAKING SUCCESS IN THE MARKET. BY THE 2013 INVESTMENT, BETWEEN CONVERSATIONS AND PRESS, IT, IT APPEARED THAT THE COMPANY HAD A PROVEN TECHNOLOGY WITH AN EXTREMELY LARGE MARKET. AND WHAT WAS, WHAT WAS PUT IN THE OFFERING MEMO, AND WHAT WAS COMMUNICATED TO ME, IS THE COMPANY HAD PROVEN ITSELF. THEY WERE RAISING MONEY TO GROW FASTER. THIS WAS GROWTH CAPITAL.
MR. BOSTIC: AND THE EARLIER CONVERSATIONS THAT YOU HAD HAD WITH MS. HOLMES, WAS THAT INFORMATION THAT YOU GAINED FROM HER STILL A FACTOR IN YOUR DECISION TO INVEST IN 2013?
ALAN EISENMAN: IT WAS A MINOR FACTOR. I THOUGHT THAT THE COMPANY HAD MADE SIGNIFICANT PROGRESS AND IN THE 2006 TO 2010 TIMEFRAME. AND THERE WAS ALSO INFORMATION THAT AS TIME GOES ON, TECHNOLOGY GETS BETTER. SO THEIR READER, I THINK THEY CALLED IT THE EDISON, THERE WERE LATER VERSIONS JUST LIKE THE IPHONE. THERE IS THE IPHONE 6, AND THEN THE 7, AND THEN THE 8. SO MY UNDERSTANDING IS THAT THE TECHNOLOGY WAS PROVEN, THEY WERE JUST PERFECTING IT. THEY WERE MAKING IT AN EVEN BETTER TECHNOLOGY.
MR. BOSTIC: YOU ALSO DISCUSSED WITH MR. DOWNEY OPPORTUNITIES THAT YOU HAD TO SELL YOUR THERANOS STOCK. DO YOU RECALL THAT?
ALAN EISENMAN: YES.
MR. BOSTIC: WHEN YOU WERE EVALUATING THOSE OPPORTUNITIES, DID YOU HAVE THE INFORMATION THAT YOU NEEDED TO MAKE THOSE DECISIONS?
ALAN EISENMAN: NO, I DID NOT.
MR. BOSTIC: OKAY. ULTIMATELY YOU DECIDED NOT TO SELL YOUR THERANOS STOCK AT ANY POINT PRIOR TO 2016 OR 2017; CORRECT?
ALAN EISENMAN: NO. I SERIOUSLY CONSIDERED SELLING MY STOCK WHEN CHRIS BOIES MADE THE OFFER, BUT THEN THERE WAS A PERIOD OF TWO OR THREE MONTHS WHERE HE WOULD NOT FOLLOW THROUGH, HE DID NOT RESPOND TO CALLS, HE WOULD NOT RESPOND TO EMAILS, AND THEN A FEW MONTHS AFTER THAT ALL OF THE NEGATIVE PUBLICITY HIT, AND OBVIOUSLY THEY WERE NOT GOING TO BUY MY STOCK ONCE THE CASCADE OF NEGATIVE PUBLICITY WAS UNLEASHED.
MR. BOSTIC: YOU DISCUSSED WITH MR. DOWNEY AT A COUPLE POINTS -- WHAT YOUR STOCK MIGHT HAVE BEEN WORTH AT A COUPLE OF POINTS IF YOU HAD SOLD IT. DO YOU REMEMBER THAT?
ALAN EISENMAN: I DO.
MR. BOSTIC: AND WHAT IS YOUR UNDERSTANDING OF WHAT YOUR STOCK IN THERANOS IS WORTH TODAY?
ALAN EISENMAN: IT'S NOT AN UNDERSTANDING, IT'S A CONCLUSION. IT'S WORTH ZERO.
MR. BOSTIC: MAY I HAVE A MOMENT, YOUR HONOR?
JUDGE DAVILA: YES.
(DISCUSSION AMONGST GOVERNMENT COUNSEL OFF THE RECORD.)
MR. BOSTIC: NO FURTHER QUESTIONS, YOUR HONOR.
MR. DOWNEY: YOUR HONOR, I JUST HAVE ABOUT THREE QUESTIONS FOLLOWING UP ON THAT.
RECROSS-EXAMINATION BY MR. DOWNEY:
MR. DOWNEY: MR. EISENMAN, JUST NOW ON THE REDIRECT EXAMINATION YOU TALKED WITH MR. BOSTIC ABOUT SHARING INFORMATION AMONGST A GROUP ABOUT THE THERANOS INVESTMENT. DO YOU RECALL THAT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND I JUST WANT TO SHOW YOU AN EXHIBIT TO SEE IF IT IDENTIFIES SOME MEMBERS OF THAT GROUP. OKAY?
ALAN EISENMAN: OKAY.
MR. DOWNEY: YOUR HONOR, MAY I APPROACH THE WITNESS?
JUDGE DAVILA: YES.
BY MR. DOWNEY:
MR. DOWNEY: AND LOOKING AT EXHIBIT 1362, IS THIS THE EMAIL IN WHICH YOU COMMUNICATE TO MR. BALWANI THAT YOU DO INTEND TO MAKE AN INVESTMENT IN THERANOS IN LATE 2013?
ALAN EISENMAN: YES.
MR. DOWNEY: YOUR HONOR, I MOVE TO ADMIT 1362.
MR. BOSTIC: NO OBJECTION.
JUDGE DAVILA: IT'S ADMITTED. IT MAY BE PUBLISHED.
(GOVERNMENT'S EXHIBIT 1362 WAS RECEIVED IN EVIDENCE.)
BY MR. DOWNEY:
MR. DOWNEY: AND I JUST WANT TO BLOW UP THE LIST OF INDIVIDUALS UNDERNEATH THERE. AND ALAN EISENMAN IS OF COURSE YOURSELF?
ALAN EISENMAN: CORRECT.
MR. DOWNEY: AND IS SHERRIE EISENMAN YOUR DAUGHTER OR YOUR WIFE?
ALAN EISENMAN: MY WIFE.
MR. DOWNEY: AND THEN THERE ARE TWO OTHER ENTITIES LISTED, GORDON FAMILY TRUST AND CROFTON CAPITAL GP. WHAT ARE THOSE?
ALAN EISENMAN: GORDON FAMILY TRUST IS A TRUST WITH MY THREE KIDS AND THEIR NINE COUSINS.
MR. DOWNEY: AND WAS THAT ESTABLISHED BY THEIR GRANDFATHER?
ALAN EISENMAN: YES, IT WAS.
MR. DOWNEY: AND IS THAT MR. GORDON WHO WE HAD DISCUSSED A FEW MOMENTS AGO?
ALAN EISENMAN: YES.
MR. DOWNEY: AND HAD YOU RECOMMENDED TO MR. GORDON THAT HE MAKE THIS INVESTMENT?
ALAN EISENMAN: I WOULDN'T SAY I RECOMMENDED, BUT WE HAVE FAMILY MEETINGS WHERE WE TALK ABOUT OPPORTUNITIES WE'RE LOOKING AT, AND WE DECIDE, THE DIFFERENT ENTITIES DECIDE.
MR. DOWNEY: AND WHAT IS CROFTON CAPITAL GP?
ALAN EISENMAN: CROFTON CAPITAL IS A PARTNERSHIP WITH MY WIFE'S THREE SIBLINGS.
MR. DOWNEY: AND IS THAT ACTUALLY THE FAMILY OFFICE OF YOUR WIFE'S FAMILY?
ALAN EISENMAN: NO. IT'S -- WELL, THE FAMILY OFFICE, YES. IT'S TITLED CROFTON CAPITAL, THAT'S CORRECT.
MR. DOWNEY: OKAY. AND WHEN I SAY, "FAMILY OFFICE," I MEAN JUST THE ENTITY FOR YOUR IN-LAW'S FAMILY THAT, AMONG OTHER THINGS, MAKES DECISIONS AS TO HOW TO INVEST THEIR MONEY; IS THAT RIGHT?
ALAN EISENMAN: YES.
MR. DOWNEY: AND WHEN YOU GOT INFORMATION ABOUT THERANOS OVER TIME BETWEEN 2016 AND 2013, WOULD YOU ALWAYS BE CAREFUL TO SHARE THAT INFORMATION WITH PEOPLE IN THIS GROUP?
ALAN EISENMAN: I CAN'T SAY THAT WE ALWAYS SHARED, AND THEY WERE PRIVY TO SOME OF THE SAME INFORMATION IF IT WAS COMING FROM THE COMPANY.
MR. DOWNEY: OKAY. WELL, DID THEY, TO YOUR KNOWLEDGE, HAVE DIRECT COMMUNICATIONS WITH THE COMPANY?
ALAN EISENMAN: I'M SORRY, DID THEY?
MR. DOWNEY: DID THEY, TO YOUR KNOWLEDGE, HAVE DIRECT COMMUNICATIONS WITH THE COMPANY?
ALAN EISENMAN: NOT TO MY KNOWLEDGE, BUT IT'S POSSIBLE.
MR. DOWNEY: BUT IF YOU LEARN SOMETHING TO THE COMPANY, YOU CONVEYED IT ON TO THEM; CORRECT?
ALAN EISENMAN: THAT'S A POSSIBILITY.
MR. DOWNEY: AND ANY VIEWS THAT YOU HAD OF THE COMPANY AS YOU WENT THROUGH THE EXPERIENCE OF BEING AN INVESTOR, YOU WOULD, YOU WOULD CONVEY TO THEM; CORRECT?
ALAN EISENMAN: SOMETIMES YES, SOMETIMES NO.
MR. DOWNEY: FAIR ENOUGH. NOTHING FURTHER, MR. EISENMAN.
MR. BOSTIC: NOTHING FURTHER.
JUDGE DAVILA: ALL RIGHT. THANK YOU. IT'S 1:00 P.M. IS THIS WITNESS EXCUSED?
MR. DOWNEY: WELL, YOUR HONOR, NOTHING FURTHER SUBJECT TO THE DISCUSSION WE HAD EARLIER.
JUDGE DAVILA: ALL RIGHT. THANK YOU. IT SOUNDS LIKE, MR. EISENMAN, YOU MIGHT BE CALLED BACK TO TESTIFY TOMORROW. SO I'M NOT GOING TO EXCUSE YOU AT THIS POINT. YOU'LL BE NOTIFIED BY THE GOVERNMENT, I THINK A REPRESENTATIVE, AS TO WHETHER OR NOT YOU NEED TO COME BACK AND WHEN THAT IS.
ALAN EISENMAN: CAN I ASK YOU A QUESTION? IS THAT FAIR?
JUDGE DAVILA: YES.
ALAN EISENMAN: IS IT POSSIBLE TO MAKE A DETERMINATION SO I COULD POSSIBLY CATCH A FLIGHT HOME IF I'M NOT GOING TO BE CALLED BACK?
JUDGE DAVILA: WELL, I'M NOT CERTAIN I'LL KNOW THAT, WHEN I'LL HAVE THAT INFORMATION. IT MIGHT NOT BE UNTIL TOMORROW MORNING WHEN WE'LL HAVE THAT INFORMATION.
ALAN EISENMAN: OKAY. THERE'S A LATE FLIGHT FROM 6:45 FROM SAN FRANCISCO, AND IT WOULD BE VERY HELPFUL IF I KNEW.
JUDGE DAVILA: YES, I APOLOGIZE. I DON'T THINK THAT WILL BE POSSIBLE, THAT FLIGHT WILL BE POSSIBLE. SO WE WILL, WE WILL RESUME, LADIES AND GENTLEMEN, WE'LL RESUME -- I THINK TOMORROW IS OUR 9:00 O'CLOCK START. WE'LL BE STARTING AT 9:00 A.M. TOMORROW. SIR, I DON'T KNOW WHO YOUR CONTACT IS WITH THE GOVERNMENT AND THE WITNESS PERSON, BUT THAT PERSON WILL LET YOU KNOW.
ALAN EISENMAN: OKAY. BUT I WON'T KNOW UNTIL TONIGHT OR TOMORROW, IS THAT WHAT YOU'RE SAYING?
JUDGE DAVILA: PROBABLY NOT TONIGHT. I JUST DON'T KNOW. I NEED TO TALK TO THE LAWYERS A LITTLE BIT ABOUT SOME OF OUR PROTOCOLS AND THINGS SO.
ALAN EISENMAN: OKAY. CAN I HOLD A GLIMMER OF HOPE OR POSSIBILITY THAT AFTER YOUR DISCUSSION?
JUDGE DAVILA: WELL, ALL THINGS ARE POSSIBLE, SIR.
ALAN EISENMAN: OKAY. I'LL ACCEPT THAT.
JUDGE DAVILA: AS I SAID BEFORE, THE CHICAGO CUBS WIN THE WORLD SERIES EVERY NOW AND THEN. SO ALL THINGS ARE POSSIBLE.
ALAN EISENMAN: OKAY.
JUDGE DAVILA: YOU CAN STAND DOWN, NOW, SIR. THANK YOU. AND, LADIES AND GENTLEMEN, WE'LL TAKE OUR RECESS NOW. THANK YOU FOR YOUR PATIENCE. WE'LL RESUME TOMORROW AT 9:00 A.M., 9:00 A.M. PLEASE REMEMBER THE ADMONITION. DO NOT IN ANY WAY DO ANY INVESTIGATION, DO NOT LISTEN, READ, OR TALK ABOUT ANYTHING TO DO WITH THIS CASE. I'LL CHECK IN WITH YOU TOMORROW MORNING TO SEE IF ANY OF THAT HAS OCCURRED. HAVE A GOOD EVENING. WE'LL SEE YOU TOMORROW. THANK YOU.
(JURY OUT AT 1:03 P.M.)
JUDGE DAVILA: ALL RIGHT. THE RECORD SHOULD REFLECT THAT THE JURY HAS LEFT FOR THE DAY. THE WITNESS HAS LEFT THE COURTROOM. COUNSEL, WHAT WOULD YOU LIKE TO DO ABOUT THE NOTES AND WHAT ARE YOUR THOUGHTS ABOUT THAT? MR. BOSTIC AND MR. DOWNEY, IF YOU COULD COME FORWARD. I GUESS THE FIRST QUESTION IS WILL HE MAKE HIS 6:45 FLIGHT TONIGHT?
(LAUGHTER.)
MR. DOWNEY: I DON'T KNOW.
MR. BOSTIC: YOUR HONOR, IT MIGHT BE HELPFUL IF WE JUST KNEW WHAT THE NEXT STEPS WERE SO WE KNEW WHAT WE WERE WAITING FOR.
JUDGE DAVILA: YES.
MR. BOSTIC: AS THE COURT KNOWS, THE GOVERNMENT'S INTEREST IS IN HAVING THE TRIAL MOVE FORWARD EXPEDITIOUSLY, AND WE ALSO DON'T WANT TO SEE WITNESSES INCONVENIENCED UNNECESSARILY, BUT I ALSO WANT ISSUES TO GET THE ATTENTION THEY DESERVE SO.
JUDGE DAVILA: OF COURSE. I THINK WE'RE ALL OF COMMON PURPOSE IN THAT. I KNOW YOU WANTED TO LOOK AT THESE NOTES AND WANTED SOME TIME. WE SHARED OUR THOUGHTS ABOUT THESE, WHETHER OR NOT THEY HAVE IMPORTANCE BASED ON THE TESTIMONY.
MR. DOWNEY: YES.
JUDGE DAVILA: BUT YOU NEED TIME TO LOOK THEM OVER. YOU'VE LOOKED AT ABOUT HALF OF THEM I THINK YOU'VE SAID.
MR. DOWNEY: WELL, I HAD ABOUT A HALF AN HOUR. I WENT THROUGH EACH OF THEM ONCE, BUT I WASN'T ABLE TO GO THROUGH AND FIGURE OUT WHY ALL OF THE VARIATIONS EXIST, OR RESPECTFULLY AS TO WHEN ALL OF THE VARIATIONS EXISTED. SO I REALLY HAVEN'T HAD A CHANCE TO REVIEW THEM.
JUDGE DAVILA: SO WHAT DO YOU THINK ABOUT TIMING ABOUT THIS? LET ME JUST POSE SOMETHING.
MR. DOWNEY: YES.
JUDGE DAVILA: YOU KNOW, WE HAVE A HALF A DAY THAT YOU HAVE AVAILABLE, AND I'LL ENCOURAGE YOU TO LOOK THROUGH THOSE NOTES. THIS IS REALLY YOUR TEAM'S DECISION, MR. DOWNEY --
MR. DOWNEY: YES.
JUDGE DAVILA: -- AS TO WHETHER OR NOT YOU FEEL YOU NEED TO CALL HIM BACK FOR ANY POTENTIAL DISCREPANCIES OR ANYTHING THAT WE'VE TALKED ABOUT THIS MORNING, WHAT IS THE VALUE OF THAT.
MR. DOWNEY: THAT'S WHAT I -- WHAT I WOULD LIKE TO DO, YOUR HONOR, IS TO HAVE THE OPPORTUNITY TO EXAMINE THEM, PARTICULARLY IN LIGHT OF THE TESTIMONY THAT THE WITNESS GAVE ON DIRECT. IF IT SEEMS TO BE MEANINGFUL, THEN I THINK, YOU KNOW, WE CAN LET THE COURT KNOW THAT TONIGHT. IF IT IS NOT, THEN I'M NOT GOING TO HAUL HIM BACK NEEDLESSLY.
JUDGE DAVILA: RIGHT.
MR. DOWNEY: AND OBVIOUSLY WE WERE SUCCESSFUL IN OTHERWISE FINISHING HIS EXAM SO.
JUDGE DAVILA: WELL, I APPRECIATE THAT. AGAIN, I'M NOT MEDDLING, BUT YOU'LL LOOK AT THESE, AND YOU WILL ASSESS THE TESTIMONY THAT HAS BEEN RECEIVED, AND YOU WILL MAKE A VALUE JUDGMENT AS TO WHETHER OR NOT YOU NEED ANYTHING FURTHER FROM THIS WITNESS.
MR. DOWNEY: THAT'S RIGHT, YOUR HONOR.
MR. BOSTIC: AND, YOUR HONOR, IF THE COURT IS WILLING TO IMPOSE A DEADLINE OR THINKS A DEADLINE MIGHT BE HELPFUL IN THAT REGARD, THE GOVERNMENT WOULD ENCOURAGE IT.
JUDGE DAVILA: RIGHT. I THINK -- THAT WAS MY NEXT STEP, MR. DOWNEY.
MR. DOWNEY: I THINK THAT'S FINE, YOUR HONOR. COULD I JUST HAVE UNTIL 5:00 P.M. TO GO THROUGH THEM, AND I'LL LET MR. BOSTIC KNOW?
JUDGE DAVILA: WELL, THAT MAKES HIS FLIGHT -- I DON'T KNOW WHERE HE'S STAYING BUT --
MR. DOWNEY: WELL, YOU GENTLEMEN KNOW BETTER THAN I ABOUT WHAT TIME HE WOULD NEED TO KNOW ABOUT HIS FLIGHT.
JUDGE DAVILA: WELL, YOU HAVE NOT EXPERIENCED THE FREEWAYS HERE I KNOW. YOU'RE FROM A DIFFERENT PART OF THE COUNTRY. YOU DID EXPERIENCE HERE AT 12:10 P.M., I THINK SOMEWHERE AROUND THERE, YOU EXPERIENCED A CALIFORNIA EARTHQUAKE. I DON'T KNOW IF YOU FELT IT OR NOT.
MR. DOWNEY: ACTUALLY I DIDN'T. BUT I'LL INVITE YOU TO WASHINGTON IF YOU WOULD LIKE TO SEE TRAFFIC.
JUDGE DAVILA: YOU THOUGHT, NO DOUBT, THAT WAS JUST YOUR CROSS-EXAMINATION. IT WAS EARTH SHAKING.
MR. DOWNEY: NO DOUBT.
(LAUGHTER.)
MR. DOWNEY: I THINK -- WHY DON'T YOU TELL ME WHAT TIME IT WOULD BE?
JUDGE DAVILA: WELL, I KNOW YOU NEED TO LOOK AT THIS, MR. DOWNEY.
MR. DOWNEY: RIGHT.
JUDGE DAVILA: AND I APPRECIATE -- MR. BOSTIC AGREES, YOU NEED TO GIVE IT A REVIEW TO SEE WHAT PURPOSE IT HOLDS.
MR. DOWNEY: IF ANY.
JUDGE DAVILA: RIGHT, IF ANY. AND THE WITNESS HAS EXPRESSED A DESIRE TO MAKE A 6:45 FLIGHT I THINK HE SAID. IF HE'S IN SAN JOSE, IT'S GOING TO TAKE HIM AT LEAST AN HOUR TO GET TO SAN FRANCISCO, DEPENDING ON WHEN HE LEAVES.
MR. DOWNEY: WELL, YOUR HONOR, I UNDERSTAND HIS TRAVEL SITUATION, AND I REGRET IT. I DON'T WANT TO HAVE THIS TURN ON THE WITNESS'S TRAVEL SITUATION. THERE'S A LOT GOING ON IN THE PROCEEDING. AND THE JURY AND THE COURT OBVIOUSLY HAVE DEDICATED A LOT OF TIME TO IT. I APPRECIATE, YOU KNOW, AND WOULD LIKE TO ACCOMMODATE HIM. AND IT SEEMS LIKE THERE'S A SCENARIO UNDER WHICH HE DOESN'T HAVE TO COME BACK, BUT I WOULD SAY WITH AN ISSUE SUCH AS STUDYING THE ORIGINAL OF THE DOCUMENT, I'M JUST RELUCTANT TO COMMIT DOING SO, SO HE CAN MAKE A PLANE.
JUDGE DAVILA: I UNDERSTAND THE BALANCE THERE. DO YOU THINK YOU COULD GET IT DONE BY 4:00 O'CLOCK, OR CAN YOU CHECK IN WITH MR. BOSTIC?
MR. DOWNEY: WHY DON'T WE CHECK IN SORT OF AROUND THAT TIME AND THEN WE CAN FIGURE OUT WHAT NEEDS TO BE, WHAT NEEDS TO BE DONE, IF ANYTHING, AND MAKE A PROPOSAL.
JUDGE DAVILA: OKAY. MR. BOSTIC, WILL THAT WORK?
MR. BOSTIC: THAT'S FINE. THANK YOU.
JUDGE DAVILA: AND ASSUMING THE WITNESS IS EXCUSED, AND I'LL DO THAT TOMORROW ON THE RECORD. AND YOU HAVE ANOTHER WITNESS LINED UP?
MR. BOSTIC: YES.
MR. DOWNEY: AND I THINK AFTER MR. BOSTIC AND I CHAT, MAYBE I CAN REPORT BACK TO THE DEPUTY ON WHERE WE ARE SO THE COURT WILL BE APPRISED IN ADVANCE? OR DO YOU WANT US TO REPORT IN THE MORNING?
JUDGE DAVILA: NO, NO. I'D LIKE TO KNOW TONIGHT, AND YOU CAN LET MS. DIBBLE KNOW. SHE'LL GIVE HER EMAIL, AND SHE'LL BE WITH US TOMORROW AS WELL, AND SHE'LL GIVE YOU THAT, AND I CAN BE APPRISED OF THAT. AND IF YOU DON'T NEED THE WITNESS, WE CAN TELL HIM HE'S EXCUSED.
MR. DOWNEY: I THINK THAT'S THE PLAN.
JUDGE DAVILA: AND WHAT ABOUT HIS NOTES, HOW DO WE GET HIS NOTES BACK TO HIM?
MR. DOWNEY: WELL --
JUDGE DAVILA: THAT'S GOING TO BE PART OF YOUR DISCUSSION.
MR. DOWNEY: WELL, PERHAPS COULD HE PICK THEM UP AT THE COURTHOUSE SINCE THEY'VE BEEN PRODUCED TO THE COURT?
JUDGE DAVILA: YES. BUT IT'S KIND OF THE OPPOSITE WAY FROM THE AIRPORT THOUGH.
MR. BOSTIC: WHY DON'T THE PARTIES MEET AND CONFER ON THAT, YOUR HONOR.
JUDGE DAVILA: EXACTLY. EXACTLY. THERE'S ALSO A MONDAY NIGHT FOOTBALL GAME THAT YOU'RE GOING TO PROBABLY TAKE YOUR TEAM TO SINCE YOU'RE IN CALIFORNIA.
MR. DOWNEY: WELL, THEY WERE OUT LATE IN LAS VEGAS.
JUDGE DAVILA: OF COURSE. WELL, THANK YOU FOR THE FOLLOW UP. AND I'LL WAIT TO HEAR ABOUT THE NOTES, AND WE'LL SEE WHERE WE GO. IF NOT, AT 9:00 O'CLOCK WE'LL HAVE A NEW WITNESS.
MR. BOSTIC: UNDERSTOOD.
JUDGE DAVILA: OKAY. GREAT. HAVE A GOOD EVENING.
MR. DOWNEY: THANK YOU, YOUR HONOR.
MR. BOSTIC: THANK YOU.
(COURT ADJOURNED AT 1:10 P.M.)