Rebuttal Closing Argument by the Prosecution

MR. BOSTIC: MEMBERS OF THE JURY, GOOD AFTERNOON. OVER THE COURSE OF THIS TRIAL YOU'VE HEARD THE STORY OF TWO DIFFERENT VERSION OF THE COMPANY CALLED "THERANOS." THE FIRST VERSION OF THAT COMPANY IN APPROXIMATELY 2013 HAD INVENTED AND PERFECTED A NEW BLOOD TESTING TECHNOLOGY. IT WAS A NEW DEVICE THAT COULD RUN ANY BLOOD TEST ON A TINY SAMPLE FROM A FINGERSTICK. IT WAS UNLIKE ANYTHING THAT HAD COME BEFORE. EVEN BETTER, IT COULD PERFORM THE FULL RANGE OF BLOOD TESTS, REPLACING LARGER DEVICES. IT WAS FAR SMALLER THAN CONVENTIONAL ANALYZERS, AND THAT MEANT IT COULD BE USED ANYWHERE. THE TECHNOLOGY IN THIS DEVICE HAD BEEN VALIDATED AND ENDORSED BY MAJOR PHARMACEUTICAL COMPANIES AND ACADEMIC INSTITUTIONS. THE MOST POWERFUL AND WELL EQUIPPED MILITARY FORCE IN THE WORLD WAS EVEN USING THIS DEVICE, AND USING THIS TECHNOLOGY, AND IT WAS SAVING THE LIVES OF SOLDIERS ON THE BATTLEFIELD.

THIS COMPANY HAD SIGNIFICANT REVENUES FROM EARLY ON, WHICH MAY BE UNUSUAL FOR A COMPANY AT THAT STAGE, BUT IT WAS VERY PROMISING AND IT WAS ON THE VERGE OF GOING NATIONAL AND GENERATING HUNDREDS OF MILLIONS, IF NOT BILLIONS, OF DOLLARS. THE VERSION OF THERANOS I JUST DESCRIBED WAS NEVER REAL. IT NEVER EXISTED. IT EXISTED ONLY IN THE WORDS OF THE DEFENDANT, MS. HOLMES, AND HER COCONSPIRATOR, SUNNY BALWANI. IT EXISTED IN THE WRITTEN MATERIALS THAT SHE AND HER COCONSPIRATOR PROVIDED TO INVESTORS AND TO OTHERS OUTSIDE OF THE COMPANY. AND IT EXISTED IN THE MINDS OF THE PEOPLE WHO BELIEVED HER, WHO BELIEVED THE CLAIMS THAT SHE WAS MAKING ABOUT WHAT THE COMPANY HAD DONE, WHAT THE COMPANY WAS DOING, AND WHAT IT HAD ACCOMPLISHED. AND THOSE PEOPLE WERE, OF COURSE, THE INVESTORS WHO THEN WENT ON TO RELY ON THOSE REPRESENTATIONS AND ENTRUST THE COMPANY WITH THEIR MONEY OR, OF COURSE, WITH THE PATIENTS WHO ENTRUSTED THE COMPANY TO TELL THEM WHAT WAS HAPPENING WITH THEIR HEALTH.

THE REAL VERSION OF THERANOS WHERE THE DEFENDANT WENT TO WORK EVERY DAY WAS DRAMATICALLY DIFFERENT FROM THE ROSY PICTURE THAT SHE WAS PAINTING FOR OTHERS. NOW, THE DEFENSE HAS EMPHASIZED THROUGHOUT TRIAL AND DURING ITS CLOSING ARGUMENT THAT THERE WERE MANY PEOPLE AT THERANOS WHO WERE WORKING HARD TO MAKE THE TECHNOLOGY WORK AND TO DEVELOP THAT TECHNOLOGY AND THAT THEY HAD SOME SUCCESSES. FOR THE MOST PART, THERE'S NO DISAGREEMENT THERE. IT'S NOT CLEAR THAT THE ACHIEVEMENTS THAT TOOK PLACE AT THERANOS WERE THE MIRACULOUS BREAKTHROUGHS THAT THE DEFENSE DESCRIBES. BUT I'M NOT HERE TO CRITICIZE THE EFFORTS OF THE EMPLOYEES WHO WORKED HARD TO TRY TO MAKE THAT TECHNOLOGY WORK. THE DISEASE THAT PLAGUED THERANOS WASN'T A LACK OF EFFORT, IT WAS A LACK OF HONESTY, AND IT WASN'T AT THE BOTTOM OF THE GROUND LEVEL OF THE COMPANY, IT WAS AT THE TOP AS THE EVIDENCE HAS SHOWN.

THE REASON WE'RE HERE STEMS BACK TO THE WAY THAT THERANOS AND ITS WORK WERE DESCRIBED BY ITS CEO, THE DEFENDANT, AND THE FOUNDER OF THE COMPANY. NOT, FOR THE MOST PART, THE EFFORTS THAT WERE TAKING PLACE AT THE COMPANY BY THE SCIENTISTS, ENGINEERS, AND OTHERS. SO WHAT WAS THE DARKER TRUTH AT THERANOS? WELL, FOR ONE THING, THE EVIDENCE AT TRIAL HAS AMPLY DEMONSTRATED THAT THERE WERE VERY SERIOUS PROBLEMS WITH THERANOS'S TECHNOLOGY. MS. HOLMES'S LAWYER SAID IN HIS OPENING STATEMENT THAT, QUOTE, THERE WERE PROBLEMS WITH THERANOS'S CLINICAL LABORATORY. WELL, AS YOU SAW, THAT TURNED OUT TO BE QUITE THE UNDERSTATEMENT. HE ALSO SAID SOME OF THE TESTS THAT THERANOS OFFERED IN HINDSIGHT WERE NOT PERFORMING AS WELL AS EXPECTED. WELL, THAT WAS REALLY ANOTHER UNDERSTATEMENT, WASN'T IT? AND THE EVIDENCE SHOWED THAT IT DIDN'T TAKE HINDSIGHT, IN FACT, TO SEE THOSE PROBLEMS.

THOSE PROBLEMS WERE APPARENT WHEN THEY WERE TAKING PLACE, AND THE COMPANY WENT ON OFFERING UNRELIABLE AND INACCURATE BLOOD TESTS DESPITE THAT EVIDENCE. LET'S TALK ABOUT SOME OF THE THINGS THAT YOU SAW THAT SHOW YOU THAT THERE WERE SERIOUS PROBLEMS WITH THE THERANOS TECHNOLOGY. FIRST, DO YOU REMEMBER TESTIMONY ABOUT HOW MANY THERANOS ANALYZERS IT TOOK AT THE TIME OF LAUNCH TO RUN A SINGLE PATIENT SAMPLE? YOU MIGHT RECALL THAT WHEN THERANOS FIRST STARTED OFFERING BLOOD TESTING SERVICES TO THE PUBLIC, THERANOS DIDN'T TRUST A SINGLE EDISON ANALYZER TO RUN A BLOOD TEST SAMPLE ON ITS OWN. IT NEEDED TO GROUP THOSE ANALYZERS IN GROUPS OF THREE, HAVE ALL THREE RUN THE SAME TEST, AND THEN THEY HAD A PRACTICE OF COMBINING WHAT TURNED OUT TO BE SIX RESULTS, REMOVING TWO OUTLIERS IF THEY DIDN'T LIKE THAT DATA, AND THEN AVERAGING THE OTHER FOUR.

MR. BOSTIC: YOU'LL RECALL THE FACT THAT IT TOOK THREE DEVICES TO RUN EVERY TEST MEANT THAT WHEN A PATIENT CAME IN AND NEEDED MORE THAN ONE ASSAY RUN, IT WOULD TAKE A FLEET OF EDISONS TO ACTUALLY PERFORM THAT TESTING. SO YOU HEARD THE TESTIMONY OF ERIKA CHEUNG, WHO ACTUALLY RAN THESE SAMPLES, THAT IF SOMEONE CAME IN AND, SAY, NEEDED THREE ASSAYS RUN ON EDISON, THREE DIFFERENT KINDS OF BLOOD TESTS, PLUS A CBC AND A GENERAL CHEMISTRY, FOR EXAMPLE, IT WOULD TAKE I THINK 11 DEVICES SHE TESTIFIED TO TO PERFORM THE TESTING ON THAT ONE PATIENT SAMPLE. AND SO AS SHE DESCRIBED, THE SAMPLE WOULD COME DOWN TO THE LAB AND THEN TEAMS OF TECHS WOULD SPRING INTO ACTION, AND THEY WOULD DIVIDE THE SAMPLE UP, AND THEN THEY WOULD GO TO THIS FLEET OF DEVICES THAT WAS NECESSARY TO RUN THAT SIMPLE TEST ON THAT SINGLE PATIENT SAMPLE. CONTRAST THAT WITH WHAT YOU KNOW MS. HOLMES WAS SAYING TO THE PUBLIC, TO INVESTORS, TO JOURNALISTS, AND TO OTHERS ABOUT THE CAPABILITIES OF THAT DEVICE.

YOU KNOW THAT SHE WAS PRESENTING THIS AS A DEVICE THAT ON ITS OWN COULD RUN ANY COMBINATION OF TESTS, COULD DO IT ALL AT ONCE FROM A SINGLE SAMPLE. HOW DIFFERENT THE REALITY WAS FROM HOW SHE WAS PRESENTING IT. YOU'LL ALSO RECALL THAT ERIKA CHEUNG WHO, AGAIN, HAD EXPERIENCE WORKING WITH THE THERANOS EDISON ANALYZERS AND ALSO THE THIRD PARTY ANALYZERS AT THERANOS, TALKED ABOUT THE LEVEL OF AUTOMATION INVOLVED IN THOSE TWO DIFFERENT KINDS OF DEVICES, AND SHE TALKED ABOUT ALL OF THE MANUAL STEPS THAT WERE REQUIRED TO USE THE EDISON ANALYZER. SHE TALKED ABOUT THE NEED FOR DILUTION OF SAMPLES AND OTHER STEPS THAT HAD TO BE DONE OUTSIDE OF THE MACHINE BEFORE THE SAMPLE WAS EVEN READY TO BE PROCESSED ON THE ANALYZER. SHE TOLD YOU THAT THE THIRD PARTY DEVICES ACTUALLY HAD A HIGHER LEVEL OF AUTOMATION AND WERE EASIER TO USE IN THAT WAY. AGAIN, CONTRAST THAT WITH WHAT MS.

HOLMES SAID OVER AND OVER AGAIN, WHICH WAS THAT THE THERANOS ANALYZER HAD A SUPERIOR LEVEL OF AUTOMATION, AND THAT THAT WAS A BIG PART OF THE TECHNOLOGICAL BREAKTHROUGH, THAT THAT WAS ONE OF THE REASONS WHY THE DEVICE WAS ABLE TO ACHIEVE SUCH SUPERIOR ACCURACY. YOU KNOW FROM THE TESTIMONY OF THE SECOND WITNESS IN THE CASE, ERIKA CHEUNG, THAT THAT WAS ALSO FALSE. YOU ALSO SAW EVIDENCE AND HEARD TESTIMONY ABOUT QUALITY CONTROL PROBLEMS WITH THE THERANOS ANALYZERS DURING TRIAL. AND YOU'LL RECALL THAT QUALITY CONTROL WAS A STEP THAT HAD TO BE TAKEN IN THE LAB TO CONFIRM THAT AN ANALYZER WAS WORKING BEFORE IT COULD BE USED FOR PATIENT TESTING, AND HOW IT WORKED WAS A KNOWN SAMPLE WOULD BE TESTED ON THE ANALYZER, AND IT WAS REQUIRED TO RETURN THE RIGHT RESULT, THE RESULT THAT WAS KNOWN TO BE CORRECT, IN ORDER FOR IT TO BE USED ON PATIENT SAMPLES WHERE THE RESULT WOULD BE UNKNOWN. YOU'VE HEARD AMPLE TESTIMONY THAT THE THERANOS ANALYZERS PERFORMED VERY POORLY WHEN IT CAME TO THIS QC STEP.

WE TALKED A COUPLE MINUTES AGO ABOUT THE PRACTICE AT THERANOS OF RUNNING EACH ASSAY SIX TIMES ESSENTIALLY AND THEN DISCARDING TWO OUTLIERS. WE'LL SEE THAT IN THIS EMAIL. THIS IS EXHIBIT 1287. YOU'LL RECALL THAT ON THIS OCCASION A COUPLE OF MONTHS AFTER THERANOS HAD LAUNCHED ITS TESTING SERVICES, MS. CHEUNG SENT AN EMAIL TO THIS NORMANDY 911 EMAIL ADDRESS. THIS WAS THE EMAIL ADDRESS THAT EXISTED TO HANDLE THE PROBLEMS IN THE NORMANDY LAB, THE PROBLEMS WITH THERANOS TECHNOLOGY THAT YOU HEARD CAME UP FREQUENTLY. MS. CHEUNG TESTIFIED THAT IN THIS CASE BOTH QC CONTROLS THAT SHE WAS RUNNING AT THIS TIME HAD FAILED; THAT SHE HAD RUN QC CONTROLS USING UNOPENED REAGENTS AND A NEW PACKAGE OF CARTRIDGES, BUT THOSE HAD FAILED AS WELL. MS. HOLMES WAS INFORMED OF THIS PROBLEM. SUNNY BALWANI TOLD HER ON THAT SAME DAY ABOUT WHAT WAS HAPPENING AND REPORTED TO HER, "THIS IS BEYOND UNACCEPTABLE PERFORMANCE." MS. HOLMES THEN GOT INVOLVED AND RESPONDED, "DO WE HAVE ENOUGH SAMPLE TO RUN THIS ONE ON TRADITIONAL METHODS?" THIS SHOWS MS. HOLMES'S KNOWLEDGE EVEN RELATIVELY EARLY IN THE COMMERCIAL LAUNCH OF THE THERANOS TESTING THAT THE TRADITIONAL METHODS, THE NON-THERANOS TECHNOLOGY, WAS A MORE RELIABLE METHOD THAN THE THERANOS SPECIFIC DEVICES. WHEN THE THERANOS SPECIFIC METHOD FAILED, WHEN QC COULD NOT BE PASSED, AS WAS FREQUENTLY THE CASE, MS. HOLMES ASKED, CAN WE GO BACK TO THE SAFE STANDARD? CAN WE GO BACK TO THE RELIABLE DEVICES THAT WE ALSO HAVE?

MR. BOSTIC: ULTIMATELY THIS SITUATION WAS RESOLVED, AND I SHOULD PUT RESOLVED IN QUOTES, BECAUSE YOU SEE THAT THE ANSWER, AS MS. HOLMES WAS TOLD, WAS THAT "TWO OUTLIERS HAD TO BE MANUALLY REMOVED IN ORDER TO PASS QC." SO YOU RECALL MS. CHEUNG'S TESTIMONY AND DR. ROSENDORFF'S TESTIMONY ABOUT THIS PRACTICE WHERE MULTIPLE TEST RESULTS WOULD BE GENERATED AND THE COMPANY WOULD SIMPLY IGNORE RESULTS THAT CAUSED THE DEVICE NOT TO PASS QC. THIS APPROACH YOU HEARD WAS NOT TAKEN WITH THE COMMERCIAL ANALYZERS. THE NON-THERANOS ANALYZERS DID NOT NEED TO USE THIS PROCESS. THEY DIDN'T NEED TO RELY ON THE PROCESS OF DISCARDING THE DATA IN ORDER TO APPEAR MORE RELIABLE THAN THEY WERE. YOU HEARD THAT FROM MS. CHEUNG. HIGH QUALITY CONTROL FAILURE RATES WERE A PERVASIVE PROBLEM AT THERANOS AS YOU'VE HEARD. BOTH MS. CHEUNG AND DR.

ROSENDORFF TESTIFIED ABOUT THE OVERALL RATES OF QUALITY CONTROL FAILURE, AND YOU HEARD FROM THEM THAT, FOR EXAMPLE, IN THE MONTH OF MARCH 2014, APPROXIMATELY 26 PERCENT OF EDISON QUALITY CONTROL RUNS FAILED. AND IF YOU LOOK AT THIS ON AN ASSAY BY ASSAY BASIS, YOU SEE THAT IN SOME CASES IT'S MUCH WORSE. I'LL DRAW YOUR ATTENTION TO THE COLUMN FOR THE TT3 TEST, WHICH INDICATES THAT MORE THAN 50 PERCENT OF THE QUALITY CONTROL RUNS FAILED DURING THAT MONTH. YOU HEARD TESTIMONY THAT MARCH WAS NOT AN ESPECIALLY BAD MONTH FOR THERANOS, THAT THIS WAS TYPICAL. THIS WAS TYPICAL OF THE PERFORMANCE OF THESE MACHINES. THINK ABOUT WHAT THAT MEANS. IF HALF OF THE QUALITY CONTROL SAMPLES RUN ON THIS DEVICE WERE FAILING, THINK ABOUT WHAT THAT MEANS FOR THE PATIENT SAMPLES THAT WERE BEING RUN.

IF A TEST OR A DEVICE IS ONLY ACCURATE HALF OF THE TIME, HOW CAN ANYONE, REGARDLESS OF THEIR LEVEL OF EXPERTISE OR EDUCATION, HOW CAN ANYONE BE COMFORTABLE USING THAT IN THE CLINICAL SETTING AND TRUSTING PATIENT CARE TO THAT KIND OF DEVICE? YOU ALSO SAW THAT THERE WAS AN INSTANCE WHERE THE THERANOS ANALYZER WAS COMPARED TO PREDICATE NON-THERANOS ANALYZERS IN THE CONTEXT OF PROFICIENCY TESTING SAMPLES. AND YOU'LL RECALL THAT YOU SAW THIS DATA YESTERDAY SHOWING THAT FOR TPSA, FOR EXAMPLE, THE PREDICATE DEVICE, THE NON-THERANOS DEVICE, RELIABLY RETURNED THE SAME DEVICE -- OR THE SAME RESULT, EXCUSE ME, TWICE IN A ROW WHEN THE SAME SAMPLE WAS RERUN. WHEN THE SAME THING WAS ATTEMPTED ON THE THERANOS DEVICE, IT CAME NOWHERE CLOSE TO THAT SAME KIND OF CONSISTENCY. THIS WAS A HUGE RED FLAG AS RECOGNIZED BY THE TECHNICAL PEOPLE AT THERANOS.

IT WAS DISMISSED BY SOME AT THE TIME AS BEING INCONSISTENT WITH THE ALTERNATIVE ASSESSMENT AND PROFICIENCY PROTOCOLS THAT THE COMPANY HAD AT THAT TIME OR WAS WORKING ON DEVELOPING. BUT YOU HEARD FROM DR. ROSENDORFF THAT HE STILL VIEWED THIS AS A VALID AND A USEFUL SPOT-CHECK OF THE RELIABILITY OF THE THERANOS SYSTEMS, AND THE THERANOS SYSTEMS FAILED THIS SPOT-CHECK ABYSMALLY. YOU ALSO HEARD AND SAW EVIDENCE THAT THE PROBLEMS WITH THERANOS'S TECHNOLOGY WEREN'T JUST LIMITED TO THE EDISON. SO, FOR EXAMPLE, DR. ROSENDORFF REVIEWED EVIDENCE REGARDING A STUDY THAT WAS CONDUCTED AT THERANOS, AND HE TESTIFIED THAT WHEN LOOKING AT THE VARIATIONS OBSERVED IN THAT STUDY, THE VARIATION COMPARING VENOUS TO FINGERSTICK WAS MUCH MORE PRONOUNCED WHEN FINGERSTICK SAMPLES WERE ASSAYED. AND YOU'LL RECALL THAT FINGERSTICK WAS THE TYPE OF SAMPLE THAT THERANOS RAN ON ITS MODIFIED THIRD PARTY DEVICES ALSO.

HE WAS THEN ASKED THE QUESTION, DOES THAT MEAN THAT USING THE THERANOS APPROACH ON THESE DEVICES ACTUALLY MADE THE DEVICES PERFORM WORSE THAN THEY DID IN THEIR UNMODIFIED FORM? HIS ANSWER WAS, YES, IT INCREASED THE DIFFERENCES IN RESULTS BETWEEN INSTRUMENTS. SO NOT ONLY HAD THERANOS BUILT ITS OWN ANALYZER THAT WAS NOT UP TO PAR AND WAS NOT WORKING WELL, BUT THE CHANGES THAT THE COMPANY HAD MADE TO THIRD PARTY DEVICES THAT IT HAD PURCHASED DECREASED THE ACCURACY AND RELIABILITY OF THOSE THIRD PARTY DEVICES. NOW, THERE WAS SOME DISCUSSION DURING THE DEFENSE'S CLOSING ABOUT STATISTICS IN THIS CASE AND WHETHER YOU NEED TO SEE FAILURE RATES ACROSS A PATIENT POPULATION TO UNDERSTAND THAT THESE DEVICES WERE OR WERE NOT WORKING. BASED ON THIS EVIDENCE, THE EVIDENCE AVAILABLE AT THE TIME AT THERANOS, YOU KNOW THAT THESE PROBLEMS WERE OBVIOUS AND THAT THEY WERE SERIOUS.

MR. BOSTIC: YOU ALSO HEARD TESTIMONY ABOUT THE DIFFICULTY IN IDENTIFYING INACCURATE PATIENT RESULTS. WHEN DR. ROSENDORFF WAS ON THE STAND, HE TALKED ABOUT HOW AN INACCURATE PATIENT RESULT MIGHT NOT STAND OUT FROM THE REST. IT CAN BE DIFFICULT TO IDENTIFY. YOU NEED TO HAVE OTHER INFORMATION TO COMPARE THE RESULT TO, WHETHER IT'S CLINICAL INFORMATION ABOUT HOW A PATIENT IS PRESENTING OR CONTEMPORANEOUS RESULTS FROM ANOTHER LAB. YOU NEED TO HAVE SOMETHING ELSE TO HOLD THOSE RESULTS UP TO. SO THE KIND OF STATISTICAL ANALYSIS THAT THE DEFENSE IS SAYING YOU NEED, FOR ONE THING, IT'S NOT CLEAR THAT THAT ANALYSIS WOULD EVEN BE POSSIBLE. BUT MORE IMPORTANTLY, YOU DON'T NEED IT. YOU DON'T NEED IT TO REACH THE CONCLUSION THAT THESE DEVICES WERE NOT WORKING AS WELL AS THEY SHOULD HAVE BEEN, THAT IT WAS OBVIOUS TO EVERYONE IN THE COMPANY, INCLUDING MS. HOLMES. MR.

DOWNEY ALSO TALKED ABOUT THE NATURE OF THE EVIDENCE OF FAILURE IN THIS CASE, AND HE HIGHLIGHTED ONE CATEGORY OF THAT EVIDENCE, WHICH WAS EXAMPLES OF INSTANCES WHERE THE DEVICE RETURNED AN INACCURATE RESULT. BUT THAT IS ONLY PART OF THE EVIDENCE IN THIS CASE. THAT'S ONLY PART OF THE EVIDENCE SHOWING THAT THE ANALYZER WAS NOT WORKING. YOU SHOULD NOT FOCUS SOLELY ON THAT, ESPECIALLY IN LIGHT OF THE EVIDENCE THAT SHOWED MUCH HIGHER FAILURE RATES FOR QUALITY CONTROL FOR THE THERANOS ANALYZER VERSUS THE NON-THERANOS TECHNOLOGY ALSO AT THE COMPANY. FINALLY, JUST TO CLEAR UP THE RECORD ON THAT TOPIC, MR. DOWNEY A COUPLE OF TIMES REFERENCED DR. ROSENDORFF'S TESTIMONY COMPARING FAILURE RATES OR ERROR RATES AT THERANOS TO ERROR RATES AT OTHER LABS, AND HE HAD PREVIOUSLY TESTIFIED THAT I THINK HE HAD SEEN THE SAME NUMBER APPROXIMATELY OF ERRONEOUS RESULTS AT THERANOS VERSUS HIS PREVIOUS LAB.

LATER IN HIS TESTIMONY, THOUGH, HE CLARIFIED THAT THAT ACTUALLY CAUSED HIM TO BE FAR MORE CONCERNED ABOUT THE RELIABILITY OF THERANOS'S TESTS GIVEN THE DIFFERENCE IN VOLUME BETWEEN THOSE TWO LABS. AS HE TESTIFIED, THE KEY QUESTION FOR HIM WAS, HOW FREQUENTLY ARE THESE ERRORS POPPING UP IN RELATION TO THE TOTAL NUMBER OF TESTS THAT ARE BEING PERFORMED? AND YOU'LL RECALL THAT SOME OF HIS TESTIMONY FOCUSSED ON THE EARLY DAYS OF THE THERANOS LAUNCH WHEN, AS BOTH PARTIES AGREE, THE TESTING VOLUME WAS QUITE LOW. SO A HIGH ERROR RATE DURING THAT TIME, ALL OF THESE PROBLEMS CROPPING UP SO EARLY WHEN THE TEST VOLUME WAS LOW MADE THIS EVEN MORE OF A RED FLAG FOR EVERYONE AT THE COMPANY. LET'S KEEP TALKING ABOUT WHAT WAS TRUE AT THERANOS AND HOW THINGS REALLY WERE.

YOU ALSO KNOW FROM THE EVIDENCE IN THIS CASE THAT ALTHOUGH DEFENDANT WAS REPRESENTING THAT THE COMPANY HAD A RICH ONGOING RELATIONSHIP WITH PHARMACEUTICAL COMPANIES AND WAS GENERATING A SIGNIFICANT AMOUNT OF REVENUE FROM THOSE RELATIONSHIPS, THAT WASN'T TRUE. THOSE RELATIONSHIPS WERE FAR MORE LIMITED. FOR ONE THING, YOU'LL RECALL, OR YOU'LL NOTICE IF YOU LOOK AT THE RELEVANT EXHIBITS THAT THE ASSAYS INVOLVED IN THE CONTRACTS WITH THE PHARMACEUTICAL COMPANIES WERE SPECIALIZED ASSAYS THAT WERE GENERALLY NOT THE SAME AS THE ASSAYS THAT WERE CRITICAL FOR CLINICAL CARE. IN OTHER WORDS, THE ASSAYS THAT THERANOS WAS RUNNING FOR THE PHARMA COMPANIES WERE GENERALLY NOT THE SAME ASSAYS THAT MATTERED FOR PATIENT CARE AND THE CLINICAL LAUNCH. SO THE FACT THAT THERANOS HAD EXPERIENCE IN THAT AREA IS REALLY OF LIMITED RELEVANCE. YOU ALSO HEARD TESTIMONY FROM EMPLOYEES AT THOSE PHARMACEUTICAL COMPANIES WHO TOLD YOU THAT THEY ACTUALLY HAD NEGATIVE IMPRESSIONS OF THERANOS'S TECHNOLOGY.

THEY HAD CONCERNS ABOUT ITS PERFORMANCE. IN GENERAL, THEY WERE NOT INTERESTED IN USING THE COMPANY'S TECHNOLOGY FURTHER. THE UNDISPUTED EVIDENCE ALSO SHOWS THAT THERANOS COLLECTED NO REVENUE FROM PHARMACEUTICAL COMPANIES AFTER 2009. YOU CAN FIND THAT IN EXHIBIT 7753, AND THAT WAS A CHART THAT WAS COVERED BY MS. YAM WHEN SHE WAS ON THE STAND. AGAIN, DESPITE THE DEFENDANT'S REPRESENTATIONS GOING INTO 2012, 2013 AND FORWARD, THE COMPANY HAD NOT COLLECTED A DOLLAR OF REVENUE FROM PHARMACEUTICAL WORK AFTER 2009. MR. DOWNEY RECENTLY DISCUSSED WHETHER THERANOS WAS IN NEED OF MONEY OR NOT. ALTHOUGH MS. HOLMES REPRESENTED TO INVESTORS AND OTHERS THAT THE COMPANY WAS FINANCIALLY PERFORMING WELL AND IT WAS GENERATING SIGNIFICANT REVENUES AND IT WAS ABOUT TO GENERATE EVEN MORE, SHE KNEW, BECAUSE SHE WAS CEO OF THE COMPANY, BECAUSE SHE MONITORED THE CASH POSITION, THAT THAT WAS NOT TRUE.

MR. BOSTIC: AND IF YOU LOOK AT EXHIBIT 5172, I WON'T DISPLAY IT NOW, BUT IT'S AN ACCOUNTING RECORD THAT SHOWS THAT IN SEPTEMBER THE COMPANY'S CASH BALANCE WAS DOWN TO LESS THAN 10 MILLION IF YOU DON'T COUNT THE LINE OF CREDIT THAT WOULD HAVE BEEN DIFFICULT FOR THERANOS TO ACCESS. WHAT DID THAT MEAN? WHAT DID $10 MILLION MEAN AT THAT TIME? THAT SAME EXHIBIT, 5172, SHOWS THAT AT THAT TIME, AND THIS IS IN SEPTEMBER 2013, AT THAT TIME THE COMPANY'S BURN RATE OR ITS SPEND RATE WAS APPROXIMATELY $1- TO $2 MILLION PER WEEK. SO THAT MEANT THAT THE COMPANY WAS LESS THAN TWO MONTHS FROM RUNNING OUT OF MONEY AND HAVING TO CLOSE ITS DOORS. THAT WAS AROUND THE TIME WHEN THE COMPANY WAS PURSUING ITS LAUNCH WITH WALGREENS BECAUSE IT DESPERATELY NEEDED THE CAPITAL UNDER THAT CONTRACT. IT WAS ALSO AGGRESSIVELY PURSUING INVESTMENT FROM INVESTORS BECAUSE IT DESPERATELY NEEDED THE CAPITAL FROM THOSE INVESTMENTS.

THAT IS ABSOLUTELY PART OF THE MOTIVE IN THIS CASE, AND ALTHOUGH YOU'RE NOT REQUIRED TO FIND MOTIVE, IT'S NOT AN ELEMENT OF ANY OF THE CHARGED CRIMES, IT'S IMPORTANT TO UNDERSTAND THAT THAT WAS CERTAINLY ON THE MINDS OF BOTH DEFENDANT, HOLMES AND BALWANI, IN THIS CASE AS THEY DECIDED HOW TO APPROACH THEIR DEALINGS WITH WALGREENS AND THE MISREPRESENTATIONS THEY MADE THERE, AND THEIR APPROACH TO INVESTORS AND THE MISREPRESENTATIONS THEY MADE TO THEM. ALTHOUGH MS. HOLMES WAS REPRESENTING TO THE PUBLIC THAT THE COMPANY'S TECHNOLOGY WAS BEING ACTIVELY USED BY THE MILITARY, YOU KNOW THAT THAT'S NOT TRUE. DURING CLOSING MR. DOWNEY MADE SOME REFERENCE TO SOME OF THE LIMITED ENGAGEMENTS THAT THE COMPANY HAD WITH THE MILITARY. LET ME JUST GO THROUGH THEM TO MAKE SURE THAT WE'RE ALL ON THE SAME PAGE ABOUT THE CRITICAL FACT THAT NONE OF THESE ENGAGEMENTS INVOLVED ACTUAL CLINICAL USE OF THE ANALYZER. NONE OF THESE WERE USE OF THE THERANOS TECHNOLOGY FOR ITS INTENDED PURPOSE.

SO, FOR EXAMPLE, FOR SOCOM, THAT'S SPECIAL OPERATIONS COMMAND, MR. EDLIN TESTIFIED THAT TWO DEVICES WERE SENT TO A BASE IN KENTUCKY. HE TESTIFIED THAT THOSE DEVICES WERE NOT EVEN CAPABLE OF RUNNING A CBC, A BASIC COMPLETE BLOOD COUNT, THAT THEY WOULD HAVE HAD TO BE REPLACED LATER IN ORDER FOR THAT TEST TO BE POSSIBLE. AND AS FAR AS HE KNOWS, THOSE DEVICES WERE NEVER USED FOR ANYTHING. AGAIN, TWO DEVICES, SENT TO KENTUCKY, NEVER USED, AND THAT WAS THE EXTENT OF THE SOCOM DEALING. FOR AFRICOM, MR. DOWNEY REFERENCED THIS ONE AS WELL. EXHIBIT 12251 TELLS YOU WHAT THIS WAS ACTUALLY ABOUT. IT WAS NOT CLINICAL USE OF THE ANALYZER. IT WAS NOT USE OF THE ANALYZER TO TEST ANY PATIENT SAMPLES. INSTEAD, THIS WAS A TEST TO SEE WHETHER THE DEVICE WOULD FUNCTION, WHETHER IT WOULD SUCCESSFULLY START UP, POWER DOWN, THINGS LIKE THAT, IN THE ENVIRONMENT. HERE'S A QUOTE FROM THAT DOCUMENT. IT SAYS, "ALL LABORATORY RESULTS WILL BE ARTIFICIALLY CREATED.

NO ACTUAL LABORATORY DATA WILL BE COLLECTED ON VOLUNTEERS." YOU'LL RECALL FROM MR. EDLIN'S TESTIMONY THAT THIS WAS AN EXPERIMENT WHERE THE RESULTS FOR THE TESTS THAT WERE GOING TO BE RUN HAD BEEN PREDETERMINED. THEY DIDN'T ACTUALLY RELATE TO WHAT WAS HAPPENING IN PATIENTS' BODIES, AND NO TREATMENT DECISIONS WOULD HAVE BEEN MADE BASED ON THOSE TESTS EITHER. HOW ABOUT CENTCOM? THIS IS THE COMPONENT OF THE MILITARY THAT GENERAL MATTIS WAS IN CHARGE OF. BOTH HE AND MR. EDLIN TESTIFIED THAT ALTHOUGH CENTCOM CONSIDERED AND WAS INTERESTED IN SIDE BY SIDE TESTING OF THERANOS TECHNOLOGY TO SEE WHETHER THERANOS ANALYZERS COULD RELIABLY PERFORM AS WELL AS CONVENTIONAL ANALYZERS, ALTHOUGH CENTCOM WAS INTERESTED IN THAT, THAT NEVER HAPPENED. AND EXHIBIT 10457 IS A PROTOCOL FOR AN LOE, THAT'S LIMITED OBJECTIVE EXPERIMENT, THAT NEVER HAPPENED. THAT WAS GOING TO INVOLVE SHIPPING DEVICES TO AFGHANISTAN. THAT PROTOCOL, THAT STUDY, NEVER GOT OFF THE GROUND. AND THEN FINALLY THERE WAS THE BURN STUDY.

THIS WAS NOT EXCLUSIVELY A MILITARY OPERATION AS YOU SAW FROM EXHIBIT 7694. THAT'S THE PUBLISHED ARTICLE WITH THE STUDY DETAILS. YOU'LL RECALL FROM THAT ARTICLE THAT THIS WAS A STUDY OF A TREATMENT TECHNIQUE THAT HAD NOTHING TO DO WITH THERANOS. NO TREATMENT DECISIONS WERE BASED ON THE USE OF THE THERANOS TEST RESULTS. AND THIS TESTING ALSO OCCURRED EXCLUSIVELY WITHIN THE U.S. IT WAS NOT IN THE BATTLEFIELD. IT DID NOT EXCLUSIVELY INVOLVE SOLDIERS. SO THIS ALSO WAS NOT ANYTHING LIKE WHAT MS. HOLMES WAS REPRESENTING WAS HAPPENING.

MR. BOSTIC: IT'S IMPORTANT TO REMEMBER THAT IN NONE OF THESE CASES WAS THERE EVEN COMPARATIVE TESTING TO SEE WHETHER THE THERANOS DEVICE COULD PERFORM WELL ENOUGH FOR ACTUAL USE. THAT WOULD HAVE BEEN THE FIRST STEP BEFORE ANY SOLDIERS WERE ACTUALLY TREATED BASED ON THERANOS TEST RESULTS, AND THAT PRECONDITION, THAT TEST OF THE THERANOS TECHNOLOGY NEVER EVEN OCCURRED. SO THAT SHOULD GIVE YOU AN IDEA OF HOW FAR AWAY MS. HOLMES'S REPRESENTATIONS WERE FROM THE ACTUAL TRUTH ON THAT TOPIC. SO THAT WAS THE TRUTH AT THERANOS. THE PEOPLE, THOUGH, AND THE ORGANIZATIONS THAT MS. HOLMES WANTED TO DO BUSINESS WITH DIDN'T KNOW THOSE FACTS, AND THEY COULD NOT BE ALLOWED TO KNOW THAT TRUTH. IF INVESTORS HAD KNOWN THOSE FACTS, THEY NEVER WOULD HAVE WRITTEN CHECKS TO THERANOS. THEY NEVER WOULD HAVE INVESTED THEIR MONEY. IF WALGREENS HAD KNOWN THOSE FACTS, THEY WOULDN'T HAVE PARTNERED WITH THERANOS AND AGREED TO PUT THERANOS'S TESTING SERVICES IN WALGREENS STORES.

AND IF PATIENTS HAD KNOWN THOSE FACTS, THEY NEVER WOULD HAVE TRUSTED THERANOS TO TELL THEM WHAT WAS HAPPENING WITH THEIR HEALTH. IN OTHER WORDS, THOSE FACTS, THE TRUTH, WERE FATAL TO THERANOS, AND MS. HOLMES KNEW THAT. SO, AS A RESULT, MS. HOLMES SET OUT TO MAKE SURE THAT THE PEOPLE THAT SHE CARED ABOUT DOING BUSINESS WITH, THE PEOPLE WHOSE MONEY SHE NEEDED, HAD A DISTORTED AND INACCURATE VIEW OF THE COMPANY IN THEIR HEADS. HER SCHEME TO DEFRAUD CAME TO ENCOMPASS INVESTORS IN THE COMPANY AND PATIENTS WHO CAME TO THERANOS FOR BLOOD TESTS, RESULTING IN THE CHARGES IN THIS CASE. LET'S TALK NOW ABOUT SOME OF THE ARGUMENTS YOU'VE SEEN FROM THE DEFENSE OVER THE COURSE OF TRIAL AND ESPECIALLY IN CLOSING. WE'LL LOOK AT THE MAIN THEMES THAT MS. HOLMES'S LAWYERS HAVE OFFERED AND WALK THROUGH WHY NONE OF THEM GETS IN THE WAY OF A CONVICTION ON ALL COUNTS IN THIS CASE.

FIRST, WE MENTIONED THIS BEFORE, THE DEFENSE HAS HIGHLIGHTED THE HARD WORK THAT OCCURRED AT THERANOS, AND IN PARTICULAR THE HARD WORK THAT THE DEFENDANT HERSELF DID. AGAIN, THERE'S NO DISPUTE ON THAT FACT. THE EVIDENCE SHOWS THAT MS. HOLMES DEVOTED A LOT OF TIME AND ENERGY TO THIS COMPANY. THE COMPANY WAS VERY IMPORTANT TO HER. THERE'S ALSO NO EVIDENCE THAT MS. HOLMES CREATED THE COMPANY, THAT SHE ASSEMBLED THE BOARD, THAT SHE HIRED SCIENTISTS FOR THE PURPOSE OF CONDUCTING A FRAUD. THAT'S NOT THE GOVERNMENT'S ALLEGATION. FOR ONE THING, THE EVIDENCE SHOWS THAT SHE FOUNDED THE COMPANY IN THE EARLY 2000'S, AND THE CHARGED CRIMES IN THIS CASE DON'T START UNTIL 2010 ON THE INVESTOR SIDE AND 2013 FOR THE PATIENT SIDE. SO THE PARTIES AGREE THAT MS. HOLMES WORKED HARD, THAT SHE WANTED THERANOS TO SUCCEED. SHE WANTED HER COMPANY TO BE SUCCESSFUL. THE DEFENSE HOLDS THAT OUT AS A REASON TO DOUBT MS. HOLMES'S INTENT TO DEFRAUD IN THIS CASE. BUT, IN FACT, THAT WAS HER MOTIVE.

THAT WAS THE MOTIVE FOR THE SCHEME TO DEFRAUD. SHE DID THIS ON BEHALF OF THE COMPANY. SHE COMMITTED THESE CRIMES BECAUSE SHE WAS DESPERATE FOR THE COMPANY TO SUCCEED, AND WE'LL TALK ABOUT SOME OF THE EVIDENCE THAT SHOWS THAT. THE DEFENSE ALSO MENTIONED GOOD FAITH A COUPLE OF TIMES, AND I WANT TO BE CLEAR ABOUT WHAT THE INSTRUCTIONS IN THIS CASE WILL SHOW. SO AFTER I'M FINISHED WITH MY OPPORTUNITY TO ADDRESS YOU, THE COURT IS GOING TO INSTRUCT YOU ON THE RELEVANT LAW IN THIS CASE, AND THAT WILL BE THE LAW THAT YOU SHOULD FOLLOW IN YOUR DELIBERATIONS. I EXPECT THAT THE COURT IS GOING TO INSTRUCT YOU SPECIFICALLY ON GOOD FAITH. I THINK THAT WILL BE JURY INSTRUCTION NUMBER 22. HERE'S THE IMPORTANT THING TO KNOW HERE IN CONNECTION WITH THE DEFENSE ARGUMENT. GOOD FAITH THAT WOULD PREVENT A CONVICTION IS GOOD FAITH BELIEF IN THE TRUTH OF THE SPECIFIC MISREPRESENTATIONS ALLEGED. I'LL SAY THAT AGAIN.

THE ONLY KIND OF GOOD FAITH THAT PREVENTS A CONVICTION HERE IS GOOD FAITH BELIEF IN THE TRUTH OF THE SPECIFIC MISREPRESENTATIONS ALLEGED. THAT'S NOT THE SAME THING AS GENERAL GOOD FAITH BELIEF IN THE COMPANY OVERALL. IT'S NOT THE SAME THING AS A GENERAL GOOD FAITH EFFORT TO MAKE THE COMPANY WORK. IN ORDER TO FIND THAT GOOD FAITH PRECLUDES A CONVICTION HERE, MS. HOLMES MUST HAVE BELIEVED IN THE FALSE THINGS THAT SHE WAS SAYING. IT'S IMPOSSIBLE TO CONCLUDE THAT, AND WE'LL TALK SOME MORE ABOUT WHY. MR. DOWNEY ALSO HAS HIGHLIGHTED THE THEME THAT THE FAILURE OF A BUSINESS DOES NOT EQUAL A FRAUD.

MR. BOSTIC: AGAIN, THERE'S NO DISPUTE THERE. THAT'S NOT THE NATURE OF THE ALLEGATIONS IN THIS CASE. THE ACHIEVEMENTS THAT NEVER MATERIALIZED AT THERANOS ARE SOMETHING THAT WE DISCUSSED AND SOMETHING THAT IS NOT CONTROVERSIAL. BUT THEY'RE ALSO NOT A CRIME. THAT DEGREE OF FAILURE AND THE FACT THAT THOSE GOALS WERE NOT ACHIEVED DOES NOT BY ITSELF MAKE A CRIME. A VERSION OF MS. HOLMES THAT SET OUT TO ACHIEVE THE GOALS THAT SHE SET OUT TO ACHIEVE AND WAS SUCCESSFUL WOULD HAVE BEEN A HERO. A VERSION WHO TRIED HER BEST AND FAILED, BUT WAS STILL HONEST ABOUT IT, STILL WOULD HAVE BEEN SOMEONE DESERVING OF RESPECT, EVEN ADMIRATION. BUT THAT'S NOT THE VERSION THAT WE SEE IN THE EVIDENCE IN THIS CASE. INSTEAD, WE SEE A CEO OF A COMPANY WHO WAS SO DESPERATE FOR THE COMPANY TO SUCCEED, SO AFRAID OF FAILURE, THAT SHE WAS WILLING TO DO ANYTHING TO KEEP THAT COMPANY FROM FAILING, TO BOLSTER THE REPRESENTATION OF THE COMPANY, AND TO ARTIFICIALLY CREATE SUCCESS OF THE COMPANY. SO BY CONVICTING MS.

HOLMES, BY FINDING THAT ALL OF THE ELEMENTS ARE MET IN THIS CASE, YOU'RE NOT PUNISHING THE DEFENDANT FOR BEING AMBITIOUS AND FAILING. WE ADMIRE PEOPLE WHO SET AMBITIOUS GOALS AND SET OUT TO ACHIEVE THEM. THIS CASE WENT BAD FOR THERANOS AND MS. HOLMES WHEN SHE MADE THE OTHER CHOICE, WHEN SHE REFUSED TO ACCEPT FAILURE AND TURNS TO BREAKING THE LAW INSTEAD. THE DEFENSE HAS ALSO HIGHLIGHTED MS. HOLMES'S YOUTH AND RELATIVE INEXPERIENCE AS A POSSIBLE EXCUSE IN THIS CASE. YOU SHOULDN'T BE DISTRACTED BY THAT. ALTHOUGH THE DEFENSE HIGHLIGHTS THE AGE MS. HOLMES WAS WHEN SHE FOUNDED THE COMPANY, IT'S IMPORTANT TO REMEMBER THAT THE PERSON ON TRIAL IS 37 YEARS OLD TODAY. IN 2013 AND 2014 WHEN SHE WAS DECIDING TO OFFER FLAWED BLOOD TESTS TO THE PUBLIC, SHE WAS 29 AND 30. IN 2010 WHEN THE FRAUD ON INVESTORS BEGAN, SHE WAS 26. THAT IS CERTAINLY OLD ENOUGH TO KNOW THE DIFFERENCE BETWEEN RIGHT AND WRONG. IT'S OLD ENOUGH TO KNOW THE DIFFERENCE BETWEEN HONESTY AND DISHONESTY.

AND LEST YOU THINK THERE'S SOMETHING ABOUT THIS SPECIFIC SETTING THAT MADE IT DIFFICULT TO TELL THE DIFFERENCE BETWEEN RIGHT AND WRONG OR TO KNOW WHAT THE RIGHT THING WAS, ASK ERIKA CHEUNG. ASK ERIKA CHEUNG HOW YOUNG IS TOO YOUNG TO KNOW THAT OFFERING INACCURATE BLOOD TESTS IS A BAD THING. YOU RECALL THAT MS. CHEUNG JOINED THERANOS JUST OUT OF COLLEGE. IT WAS HER FIRST JOB AFTER GRADUATING, AND IT ONLY TOOK HER A HANDFUL OF MONTHS TO SEE THE PROBLEMS THAT WERE OBVIOUS WITH THE THERANOS TECHNOLOGY AND TO DECIDE THAT SHE DIDN'T WANT TO BE A PART OF IT. BY THE WAY, SHE HAD NO IDEA ABOUT THE MISLEADING STATEMENTS THAT MS. HOLMES WAS MAKING TO INVESTORS AND TO OTHERS. IMAGINE WHAT SHE WOULD HAVE DONE IF SHE HAD KNOWN ABOUT THAT. ANOTHER THEME THAT WE'VE SEEN IN MS. HOLMES'S LAWYERS' ARGUMENTS IS THE THEME OF BLAMING OTHERS. AND LET'S TALK FIRST ABOUT THE BOARD OF DIRECTORS.

YOU'LL SEE THAT WITH A NUMBER OF THESE ARGUMENTS, THE DEFENSE WOULD LIKE YOU TO BELIEVE THAT THERE WERE OTHER PEOPLE AT THERANOS WHO SHOULD HAVE ADVISED HOLMES BETTER, PEOPLE WHO SHOULD HAVE PREVENTED BAD THINGS FROM HAPPENING, PEOPLE WHO WERE RESPONSIBLE FOR THE BAD THINGS, OR PEOPLE WHO GAVE MS. HOLMES INACCURATE INFORMATION. NONE OF THOSE ARGUMENTS HOLD WATER. WHEN IT COMES TO THE BOARD, IT'S IMPOSSIBLE TO BLAME THE BOARD OF DIRECTORS FOR WHAT HAPPENED HERE, MAINLY BECAUSE THE BOARD WAS NOT GIVEN THE INFORMATION THAT IT NEEDED TO HELP THE COMPANY NAVIGATE THE PROBLEMS THAT IT WAS FACING. AND A GOOD EXAMPLE OF THAT IS MS. HOLMES'S DECISION NOT TO SHARE WITH THE BOARD THE LIMITATIONS OF THE THERANOS ANALYZER. MR. DOWNEY TALKED ABOUT THIS. LET'S CLEAR UP THE RECORD HERE. THE EVIDENCE IN THE CASE SHOWS THAT THERANOS'S RELIANCE ON THIRD PARTY DEVICES WAS ABSOLUTELY CONCEALED FROM ITS BOARD OF DIRECTORS. ON DIRECT GENERAL MATTIS, A MEMBER OF THE BOARD, WAS ASKED WHETHER THERANOS'S USE OF THIRD PARTY DEVICES, WHETHER THE RELIANCE ON THIRD PARTY DEVICES WOULD HAVE STOOD OUT IN HIS MIND, FOR EXAMPLE, IF A MAJORITY OF THE TESTS RUN WERE RUN ON THIRD PARTY DEVICES? HE ANSWERED, "AT THIS POINT IT WOULD HAVE LEAPED OUT AT ME BECAUSE MY WHOLE EFFORT AT CENTCOM HAD BEEN TO TRY TO GET IT INTO THEATRE BECAUSE IT WAS DIFFERENT AND IT COULD DO THIS OFF OF THIS ONE SMALL MACHINE."

MR. BOSTIC: SO THIS WAS SOMETHING THAT ALTHOUGH GENERAL MATTIS DIDN'T HAVE A BACKGROUND IN, HE WAS NO EXPERT IN BLOOD TESTING OR MEDICAL DEVICES, HIS INTEREST IN THERANOS AND HIS INTEREST IN POSSIBLE MILITARY USE WAS PREDICATED ON THE ABILITY OF THE MACHINE, THIS ONE MACHINE, THIS ONE SMALL MACHINE, TO RUN A WIDE RANGE OF BLOOD TESTS WITHOUT RELIANCE ON THE LARGE CONVENTIONAL ANALYZERS THAT OTHER LABS USED. NOW, WHEN MS. HOLMES TOOK THE STAND, SHE CLAIMED THAT IN A LATE 2013 BOARD MEETING SHE TOLD THE BOARD ABOUT THE COMPANY'S USE OF CONVENTIONAL MODIFIED MACHINES. AND THERE'S BEEN A SUGGESTION BY THE DEFENSE THAT GENERAL MATTIS DIDN'T RECALL THAT DISCUSSION BECAUSE HE WAS TIRED. MR. DOWNEY IN CLOSING SUGGESTED THAT IT'S POSSIBLE THAT GENERAL MATTIS WAS NOT PRESENT AT THAT MEETING. THE MINUTES FOR THAT MEETING CAN BE FOUND AT EXHIBIT 4005, THAT'S 4-0-0-5. THEY DON'T SHOW THE SUGGESTION THAT HOLMES CLAIMS TOOK PLACE THERE.

THOSE MINUTES SHOWED A GENERAL DISCUSSION OF TRADE SECRETS, BUT THEY DON'T DISCUSS DISCLOSURE OF THE COMPANY'S USE OF MODIFIED THIRD PARTY MACHINES. AND MORE IMPORTANTLY, THEY DON'T DISCLOSE THE DISCUSSION OF THE COMPANY'S RELIANCE ON THIRD PARTY MACHINES, AND THAT'S AN IMPORTANT DISTINCTION HERE. WHEN MS. HOLMES WAS UNDER CROSS-EXAMINATION, SHE WAS ASKED, "AM I RIGHT IT'S YOUR TESTIMONY THAT YOU TOLD THE BOARD OF DIRECTORS THERANOS WAS USING MODIFIED COMMERCIAL ANALYZERS TO DO THE PHASE I TESTING?" SHE DIDN'T ANSWER "YES." HER ANSWER HERE WAS, "I TOLD THE BOARD OF DIRECTORS THAT WE HAD AN INVENTION AROUND MODIFIED COMMERCIAL ANALYZERS." THAT'S CRITICAL. IF MS.

HOLMES ONLY TOLD THE BOARD THAT THE COMPANY HAD AN INVENTION THAT INVOLVED MODIFIED THIRD PARTY DEVICES, THE MEMBERS OF THE BOARD WOULD HAVE NO REASON TO SUSPECT THAT THE COMPANY WAS RELYING ON THAT INVENTION, WAS DEPENDENT ON THAT INVENTION BECAUSE ITS OWN HOME BUILT ANALYZER COULDN'T DO THE RANGE OF TESTS THAT IT CLAIMED IT COULD DO. THAT'S THE MISSING PIECE OF INFORMATION THAT WAS WITHHELD FROM THE BOARD. AND THE FACT THAT -- OR THE CLAIM THAT MS. HOLMES TOLD THE BOARD ABOUT THIS INVENTION, ABOUT THE ABILITY TO USE MODIFIED COMMERCIAL ANALYZERS IS THE KIND OF HALF-TRUTH THAT THIS DEFENDANT WAS ESPECIALLY FOND OF USING, SOMETHING THAT ARGUABLY TECHNICALLY CORRECT, BUT STILL LEAVES THE LISTENER WITH AN UNMISTAKABLE INCORRECT UNDERSTANDING ABOUT WHAT THE TRUTH IS. IN FACT, NOT ONLY DID MS. HOLMES NOT TELL THE BOARD ABOUT THE COMPANY'S RELIANCE ON THIRD PARTY DEVICES IN 2013, SHE DIDN'T TELL THEM IN 2014 OR UNTIL LATE 2015 WHEN SHE HAD TO.

YOU'LL RECALL THAT AFTER THE OCTOBER 2015 "WALL STREET JOURNAL" ARTICLE WAS PUBLISHED, THERE WAS A SERIES OF EMAILS BETWEEN MS. HOLMES AND THE MEMBERS OF THE BOARD OF DIRECTORS WHERE THE MEMBERS OF THE BOARD WERE INTERROGATING HER, WERE ASKING HER ABOUT THE CLAIMS IN THE ARTICLE, AND SPECIFICALLY ABOUT THE COMPANY'S USE OF VEIN DRAWS AND CONVENTIONAL ANALYZERS. HERE'S AN EMAIL FROM THE DAY AFTER THE ARTICLE WAS PUBLISHED. THIS IS EXHIBIT 4553. AND THIS IS FROM MR. KOVACEVICH WHO, BY THE WAY, THE MINUTES WILL SHOW WAS PRESENT AT THE OCTOBER 2013 MEETING WHERE HOLMES CLAIMED SHE PROVIDED THIS INFORMATION TO THE BOARD ABOUT MODIFIED THIRD PARTY DEVICES. THE MINUTE ALSO SHOW THAT GENERAL MATTIS WAS PRESENT AT THAT MEETING, BY THE WAY. IN THIS EMAIL MR. KOVACEVICH ASKS, "SO WHEN BLOOD IS WITHDRAWN IN VENOUS TUBES DO I UNDERSTAND CORRECTLY THAT THE TESTS ARE THEN DONE ON LAB LIKE EQUIPMENT AND NOT EDISON?" HE'S ASKING THIS QUESTION BECAUSE HE DIDN'T KNOW.

EVEN AFTER BEING A MEMBER OF THE BOARD FOR TWO YEARS OR MORE, MR. KOVACEVICH WAS NOT AWARE OF THE COMPANY'S RELIANCE ON, THE COMPANY'S DEPENDENCE ON THIRD PARTY DEVICES INDEPENDENT OF ITS OWN HOME GROWN MODIFIER OR ANALYZER. A LITTLE WAYS UP IN THE SAME CHAIN, MR. KOVACEVICH HAS RECEIVED SOME MORE INFORMATION, BUT HE SAID, "I AM STILL CONFUSED, HOWEVER, REGARDING MY PREVIOUS EMAIL. AT THIS MOMENT, HOW MANY OF OUR CUSTOMER SUBMISSIONS ARE BEING TESTED ON LAB EQUIPMENT VERSUS EDISON?" MS. HOLMES'S ANSWER IS DECEPTIVE ON ITS FACE. SHE SAYS, "THAT'S CORRECT - WE ARE AT AN EXACT MOMENT IN TIME RIGHT NOW WHERE WE'VE JUST TRANSITIONED FROM OPERATING UNDER THE TRADITIONAL LABORATORY FRAMEWORK (GOVERNED BY A LAW CALLED CLIA) TO THE FDA FRAMEWORK." AND THEN IN THE PARAGRAPH BELOW SHE SAYS, "PART OF THIS TRANSITION MEANS MOVING ALL OPERATIONS FROM THE CLIA QUALITY SYSTEMS TO THE FDA QUALITY SYSTEMS."

MR. BOSTIC: SHE SAYS BELOW THAT, "WE VOLUNTARY DECIDED AND COMMUNICATED TO THE FDA THAT WE WOULD TEMPORARILY NOT USE THE NANOTAINER" -- THAT WAS THE PROPRIETARY BLOOD COLLECTION DEVICE USED WITH ITS OWN ANALYZERS -- "UNDER THE CLIA LAB FRAMEWORK UNTIL WE RECEIVED CLEARANCE." SHE GOES ON TO SAY, "WE DO NOT HAVE A GOOD PERCENTAGE NUMBER RIGHT NOW OF HOW MANY TESTS WILL BE DONE ON OUR EQUIPMENT DURING THIS TEMPORARY PERIOD." GENERAL MATTIS TESTIFIED THAT, UNDERSTANDABLY, THIS ANSWER LED HIM TO BELIEVE THAT THE COMPANY' RELIANCE ON THIRD PARTY DEVICES WAS A TEMPORARY THING, SOMETHING THAT HAD STARTED SHORTLY BEFORE THIS EMAIL, SOMETHING THAT WOULDN'T LAST VERY LONG. THAT WASN'T TRUE. THE COMPANY HAD BEEN DEPENDENT ON THIRD PARTY NON-THERANOS ANALYZERS SINCE THE DAY IT FIRST LAUNCHED IT'S TESTS TO THE PUBLIC. AND THAT'S BECAUSE THE THERANOS EDISON COULD NOT PERFORM THE WIDE RANGE OF TESTS THAT THE DEFENDANT CLAIMED AND THAT THERANOS OFFERED. SO IF MS.

HOLMES DIDN'T TELL THE BOARD OF DIRECTORS ABOUT HOW THE THERANOS TECHNOLOGY WORKED, WHAT IT COULD DO AND WHAT IT COULDN'T DO, WHAT WAS THE POINT OF THE THERANOS BOARD? WELL, THE EVIDENCE SHOWED THAT UNLIKE THE TYPICAL BOARD OF DIRECTORS, THIS WAS NOT A GROUP OF PEOPLE MEANT TO STEER THE COMPANY, TO ADVISE THE CEO. INSTEAD, THE BOARD AT THERANOS WAS JUST ANOTHER AUDIENCE. IT WAS A GROUP OF ILLUSTRIOUS AND CONNECTED PEOPLE WHO HOLMES WANTED TO IMPRESS SO THAT THEY COULD THEN GO ON TO CONNECT HOLMES AND THE COMPANY TO OTHER PEOPLE WHO COULD BENEFIT THE COMPANY. AND YOU SAW THAT THAT PLAN WORKED. HENRY KISSINGER, WHO WAS ON THE THERANOS BOARD, CONNECTED MS. HOLMES TO MR. MOSLEY, WHO THEN WENT ON, AS MR. DOWNEY HIGHLIGHTED FOR YOU, TO CONNECT HOLMES WITH MULTIPLE INVESTORS. SO HAVING THIS BOARD OF PROMINENT AND RESPECTED INDIVIDUALS CERTAINLY PAID OFF FOR THE DEFENDANT. WE'LL TALK ABOUT ANOTHER WAY SHORTLY. BUT THE EVIDENCE SHOWS THAT THAT WAS THE POINT.

THAT WAS THE MOTIVATION IN HAVING THIS GROUP OF PEOPLE. THEY WERE NOT THERE FOR THEIR CONTRIBUTIONS TO THE STEERING OF THE COMPANY AND THE DECISION MAKING OF THE MANAGEMENT. INSTEAD, THEY WERE THERE TO BE IMPRESSED AND TO BOLSTER THE REPUTATION OF THE COMPANY. ANOTHER THEME OF THE DEFENSE IS THAT MS. HOLMES WAS MISLED OR LET DOWN BY THE SCIENTISTS AND ENGINEERS AT THE COMPANY. THE EVIDENCE DOESN'T SHOW THAT, EITHER. FIRST, MS. HOLMES CLAIMS THAT THE SCIENTISTS AND ENGINEERS WHO WORKED AT THERANOS LED HER TO BELIEVE THAT THE TECHNOLOGY WAS GREAT AND THAT HER REPRESENTATIONS WERE TRUE. WE'LL TALK SOME MORE ABOUT THEM WHEN WE TALK ABOUT THE 4.0 SERIES DEVICE, WHICH IS AN IMPORTANT TOPIC. FOR NOW, YOU SHOULD RECALL THAT DURING HER TESTIMONY MS. HOLMES, FOR EXAMPLE, MADE VAGUE REFERENCE TO SCIENTISTS AND ENGINEERS IN THE COMPANY REVIEWING THE INVESTOR PRESENTATIONS WHERE DRAMATIC CLAIMS WERE MADE ABOUT WHAT THE THERANOS TECHNOLOGY COULD DO. LET'S EXPLORE THAT A LITTLE BIT.

THROUGHOUT THE TRIAL, MS. HOLMES CLAIMS TO HAVE RELIED ON ADVICE FROM DAN YOUNG, WHO WAS A SENIOR SCIENTIST AT THERANOS. BUT THE EVIDENCE SHOWED CRITICALLY THAT HE WAS UNAWARE OF THE CLAIMS THAT SHE WAS MAKING ABOUT THERANOS'S SUPERIOR PERFORMANCE, OR SUPPOSEDLY SUPERIOR PERFORMANCE. THIS IS EXHIBIT 7421, AND THIS IS AN EMAIL CHAIN RELATING TO CONCERNS THAT TYLER SHULTZ HAD RAISED. YOU SEE A FEW EMAIL CHAINS RELATING TO HIS LETTER WHERE HE RAISED DIRECTLY TO MS. HOLMES A NUMBER OF SERIOUS CONCERNS ABOUT PROBLEMS WITH THE COMPANY'S TECHNOLOGY. IN THIS EMAIL RESPONDING TO PART OF THAT LETTER FROM TYLER SHULTZ, MR. BALWANI WRITES TO DANIEL YOUNG AND ELIZABETH HOLMES, "WHERE ARE WE CLAIMING THAT OUR TESTS ARE BETTER ACROSS THE BOARD?" NOW, THIS IS IN FEBRUARY OF 2014. YOU KNOW THAT AT THIS TIME MS. HOLMES KNEW EXACTLY WHERE THOSE CLAIMS WERE. THEY WERE IN THE ARTICLES FOR WHICH SHE HAD BEEN INTERVIEWED; THE ARTICLES THAT SHE HAD APPROVED OR HAD AN OPPORTUNITY TO REVIEW BEFORE THEY WERE PUBLISHED; THEY WERE IN THE INVESTOR PRESENTATIONS THAT SHE HAD PERSONALLY GIVEN TO THE INVESTORS IN THIS CASE AND THAT SHE HAD DISCUSSED WITH THEM. AND SHE HAD ORALLY MADE THESE SAME REPRESENTATIONS TO INVESTORS. YOU'VE SEEN THAT NUMEROUS TIMES, THE CLAIM THAT THERANOS TECHNOLOGY WAS BETTER, WAS MORE ACCURATE, HAD THE HIGHEST LEVELS OF ACCURACY, AND THE LIKE. DANIEL YOUNG, THOUGH, RESPONDS TO THAT EMAIL, "I DON'T THINK WE MAKE SUCH A CLAIM. NOT THAT I HAVE SEEN ON THE WEBSITE AT LEAST."

MR. BOSTIC: NOW, YOU KNOW FROM MR. EDLIN'S TESTIMONY THAT SUCH CLAIMS DID ACTUALLY APPEAR ON THE WEBSITE. BUT THIS EMAIL FROM DANIEL YOUNG SUGGESTS THAT HE DIDN'T KNOW ANYTHING ABOUT THE REPRESENTATIONS AND THE CLAIMS THAT WERE BEING MADE TO INVESTORS. THAT SAME EMAIL GOES ON WITH DANIEL YOUNG WRITING THAT TYLER SHULTZ "SEEMED VERY SURPRISED THAT I ASKED HIM WHERE HE THOUGHT WE CLAIMED SUPERIOR PERFORMANCE OVER OTHER TESTS." HE MENTIONS THAT TYLER SHULTZ MENTIONS SOME ARTICLES, AND DANIEL YOUNG SAYS, "I ASKED HIM TO FOLLOW-UP AND HIGHLIGHT THESE SPECIFICALLY FOR ME." AGAIN, DANIEL YOUNG TRYING TO TRACK DOWN MENTIONS OR CLAIMS OF SUPERIOR PERFORMANCE, SUPERIOR ACCURACY ON THE PART OF THERANOS. UNBEKNOWNST TO HIM, HE WAS ON AN EMAIL CHAIN WITH THE VERY PERSON WHO WAS PROPAGATING THOSE CLAIMS, THE SAME PERSON WHO WAS SPREADING THOSE LIES.

FOR THAT REASON YOU SHOULD VIEW WITH SERIOUS SKEPTICISM ANY CLAIM THAT INDIVIDUALS LIKE DANIEL YOUNG WERE BEHIND THOSE CLAIMS OR HAD BLESSED THEM OR APPROVED OF THEM IN ANY WAY. YOU ALSO HEARD FROM SEVERAL OF THE COMPANY'S SCIENTISTS WHO YOU KNOW FROM THEIR TESTIMONY WOULD NEVER HAVE SAID THOSE POSITIVE SWEEPING THINGS ABOUT THERANOS'S TECHNOLOGY. THE SCIENTISTS AT THE COMPANY WERE WELL AWARE OF THE PROBLEMS WITH THE COMPANY'S TECHNOLOGY. SEVERAL OF THEM, AS YOU KNOW, RESIGNED BECAUSE OF THE SERIOUS PROBLEMS THAT THEY SAW WITH THE THERANOS ANALYZER AND THE MODIFIED DEVICES. SO THE IDEA THAT THOSE SAME INDIVIDUALS, THAT GROUP OF PEOPLE WOULD HAVE BEEN SUPPORTING HOLMES'S CLAIMS OF SUPERIOR ACCURACY OF UNPRECEDENTED QUALITY DOESN'T HOLD WATER, EITHER. LAB DIRECTORS ARE AN ESPECIALLY IMPORTANT PART OF THIS ANALYSIS, SO LET'S TALK ABOUT THEM A LITTLE BIT.

THE DEFENSE HAS GONE TO GREAT EFFORT IN THIS CASE TO PAINT ADAM ROSENDORFF, THERANOS'S LAB DIRECTOR IN 2013 AND 2014, AS BEING IN CHARGE OF ALL DECISIONS IN THE LAB. THEY HAVE BLAMED HIM FOR IMPROPER VALIDATION. THEY HAVE ATTEMPTED TO SHOW THAT HE WAS THE PERSON WHO WAS RESPONSIBLE FOR ALL OF THE ACCURACY AND RELIABILITY PROBLEMS THAT HAPPENED AT THERANOS. WHAT DOES THE EVIDENCE ACTUALLY SHOW ABOUT THAT THOUGH? FIRST OF ALL, WHEN IT COMES TO VALIDATION, YOU WILL RECALL THAT DR. ROSENDORFF TESTIFIED THAT THE VALIDATION PROCESS AT THERANOS WAS VERY RUSHED, MORE RUSHED THAN HE WANTED IT TO BE. WHEN HE WAS ASKED WHO WAS SETTING THE SCHEDULE, WHO WAS RESPONSIBLE FOR THAT PACE, HE TESTIFIED THAT THAT WAS COMING FROM MANAGEMENT. THAT WAS MS. HOLMES AND MR. BALWANI. HE ALSO TESTIFIED THAT ALTHOUGH THE ASSAYS PERFORMED WELL ENOUGH DURING THE VALIDATION PHASE, THEIR PERFORMANCE DEGRADED SIGNIFICANTLY ONCE THEY ACTUALLY STARTED USING THEM FOR PATIENT TESTING.

AND HE SAID THAT AS SOON AS THE ASSAYS STARTING BEING USED IN THE CLINICAL LAB, HE STARTED SEEING PROBLEMS, AND HE TESTIFIED ABOUT MAKING EFFORTS TO MAKE THOSE PROBLEMS KNOWN TO THE COMPANY'S MANAGEMENT IN WAYS IN WHICH HE WAS REBUFFED AND UNSUCCESSFUL IN DOING THE RIGHT THING AT THE COMPANY. ONE IMPORTANT QUESTION FOR YOU TO ASK YOURSELVES IN CONSIDERING THE ARGUMENT THAT DR. ROSENDORFF WAS REALLY IN CHARGE OF EVERYTHING IN THE LAB, IF THAT WAS REALLY TRUE, THEN WHY DID HE QUIT OUT OF CONCERN FOR THE WAY THAT THE TECHNOLOGY WAS PERFORMING? WHY DID HE QUIT IN PROTEST OF THE PRACTICES IN THE THERANOS LAB IF IT WAS WITHIN HIS POWER TO CHANGE THINGS? SO WHO WAS ULTIMATELY IN CONTROL OF THE LAB AT THERANOS? WELL, ONE RELATED QUESTION IS, WHY DIDN'T DR. ROSENDORFF STOP ALL TESTING ON THE EDISON? HE WAS ASKED ABOUT THIS WHEN HE WAS ON THE STAND. HE WAS ASKED THE QUESTION, "DID YOU EVER ASK MS. HOLMES WHETHER THERANOS WOULD CONSIDER CEASING USE OF THE EDISON ALTOGETHER?" HE SAID, "NO."

WHEN ASKED, "WHY NOT," HE SAID, "THERE WAS TREMENDOUS PRESSURE AT THE COMPANY TO SHOW THAT THIS TECHNOLOGY WAS SUCCESSFUL. IT CAME FROM THE TOP. IT PERMEATED R&D." HE THEN SAID THAT THAT DISSUADED HIM FROM MAKING THE SUGGESTION TO STOP USING THE EDISON BECAUSE HE SAID, "AT VARIOUS POINTS I THOUGHT I MIGHT BE FIRED IF I TOOK TOO STRONG A POSITION ON IT." OF COURSE THAT WOULD HAPPEN. WHAT DO YOU THINK WOULD HAPPEN IF, BASED ON ALL OF THE INFORMATION YOU KNOW ABOUT HOW THIS COMPANY WAS RUN, SOMEONE CAME FORWARD TO THE MANAGERS OF THE COMPANY, THE FOUNDER AND THE COO, AND ASKED THE COMPANY TO STOP USING ITS OWN PROPRIETARY TECHNOLOGY?

MR. BOSTIC: THE WHOLE POINT OF THE COMPANY WAS TO DEVELOP AND USE THIS TECHNOLOGY. HE KNEW THAT IDEA WAS A NONSTARTER. HE FELT THE PRESSURE THAT WAS BEING IMPOSED FROM THE TOP TO KEEP USING THE TECHNOLOGY, AND THAT'S WHY HE LIMITED HIS SUGGESTIONS TO THE THINGS THAT HE THOUGHT WOULD ACTUALLY HAVE A CHANCE OF SUCCEEDING. YOU'LL RECALL IN CONNECTION WITH THIS THE SEQUENCE OF EVENTS AROUND HCG IN MAY OF 2014. MR. DOWNEY ALLUDED TO THIS DURING HIS CLOSING, AND YOU'LL RECALL THAT ON MAY 30TH, 2014, DR. ROSENDORFF, IN RESPONSE TO SERIOUS PROBLEMS THAT HE WAS SEEING WITH HCG, ORDERED THAT THE HCG ASSAY BE TAKEN OFF OF THE THERANOS PROPRIETARY SYSTEM, THAT IT BE RUN ONLY ON NON-THERANOS DEVICES THAT HE VIEWED AS MORE RELIABLE. WHAT HAPPENED NEXT? MR. DOWNEY CITED A NUMBER OF EXHIBITS TO YOU, BUT STILL ONLY PRESENTED PART OF THE STORY. I'LL CITE SOME EXHIBITS FOR YOU: 5418 INCLUDES THE MAY 30TH EMAIL WITH DR. ROSENDORFF TAKING HCG OFF OF EDISON.

BUT ON THAT SAME EMAIL, DAYS LATER IN AN EMAIL THAT DOES NOT INCLUDE DR. ROSENDORFF, YOU'LL RECALL THAT DANIEL YOUNG WRITES TO COMPANY MANAGEMENT SAYING IT'S NOT CLEAR THAT THAT DECISION HAD BEEN MADE. DR. ROSENDORFF'S EMAIL WAS IN ALL CAPS YOU'LL REMEMBER. HE HAD MADE THAT DECISION AS LAB DIRECTOR TO TAKE HCG OFF OF THE EDISON. DAYS LATER DANIEL YOUNG IS REPORTING THAT IT'S NOT CLEAR THAT THAT DECISION HAD BEEN MADE. A COUPLE WEEKS LATER, IN EXHIBIT 13876 WE SEE DR. ROSENDORFF ASKING FOR A STATUS UPDATE ON THE ASSAY, AND HE'S INFORMED AT THAT TIME BY MR. BALWANI THAT HCG IS STILL ON NANOTAINERS; IN OTHER WORDS, THAT IT'S STILL BEING RUN ON THE EDISON, THAT IT'S BACK ON THE EDISON. MR. DOWNEY JUST CITED THAT SAME EMAIL TO YOU SUPPOSEDLY AS EVIDENCE THAT DR. ROSENDORFF KNEW AND APPROVED THE CONTINUED USE OF HCG ON EDISON. WHAT DOES IT ACTUALLY SHOW? IT ACTUALLY SHOWS THAT DR. ROSENDORFF DIDN'T HAVE CONTROL OVER WHAT EQUIPMENT WAS USED IN HIS OWN LAB.

HE WAS FORCED TO ASK QUESTIONS ABOUT HOW A GIVEN ASSAY WAS BEING RUN BECAUSE IT WASN'T UP TO HIM. IF IT HAD BEEN UP TO HIM AND IF HIS APPROVAL WOULD HAVE BEEN REQUIRED, HE WOULDN'T HAVE TO ASK MR. BALWANI WHAT DECISION HAD BEEN MADE AND WHAT PROCESS IS BEING USED. HE ALSO TESTIFIED THAT DESPITE THE CONTINUED USE OF EDISON FOR HCG, THAT THE PROBLEMS WITH THAT ASSAY WERE NEVER, EVER SOLVED TO HIS SATISFACTION. AND YOU CONTINUED TO SEE, WHEN DR. ROSENDORFF WAS ON THE STAND, CONTINUED QUALITY CONTROL FAILURES AND OTHER PROBLEMS RELATING TO THAT VERY, VERY IMPORTANT TEST. NOW, WHEN DR. ROSENDORFF WAS ON THE STAND, THE DEFENSE ATTACKED HIM. YOU'LL RECALL THAT THE CROSS-EXAMINATION WAS VERY LENGTHY AND SOMEWHAT HOSTILE. DR. ROSENDORFF WAS ATTACKED FOR EVERYTHING FROM COOPERATING WITH THE GOVERNMENT, THERE WERE QUESTIONS ABOUT HOW MANY TIMES HE MET WITH THE GOVERNMENT AND WHO WAS PRESENT.

HE WAS ATTACKED FOR NOT BEING QUICK ENOUGH TO RESPOND TO QUESTIONS FROM DOCTORS IN ONE OR TWO INSTANCES. AND THE SUGGESTION WAS MADE THAT HE HAD BEEN ASLEEP AT THE WHEEL AT THERANOS AND NOT DONE A GOOD ENOUGH JOB OF MONITORING THE QUALITY OF TESTS, THAT THIS WAS HIS FAULT. ASK YOURSELF WHETHER THAT IS ACTUALLY WHAT MS. HOLMES AND MR. BALWANI BELIEVED ABOUT DR. ROSENDORFF IN 2014. YOU CAN DETERMINE THAT BY WHAT THEY DID AFTER DR. ROSENDORFF LEFT THE COMPANY. DR. ROSENDORFF LEFT IN NOVEMBER 2014, AND AFTER THAT SUNNY BALWANI HIRED HIS DERMATOLOGIST TO RUN THE LAB. MS. HOLMES KNEW THAT SUNIL DHAWAN WAS MR. BALWANI'S DERMATOLOGIST. THERE'S TESTIMONY THAT NEITHER MR. BALWANI -- I'M SORRY, NEITHER DR. DHAWAN NOR DR. SAWYER WERE EVER REALLY PRESENT IN THE LAB, THAT THEY DIDN'T DO ANY REAL WORK OVERSEEING THE TESTS, ESPECIALLY THE THERANOS SPECIFIC TESTS RUN ON THE EDISON AND THE MODIFIED THIRD PARTY DEVICES.

AND THEIR LACK OF PRESENCE AT THE LAB, THEIR LACK OF OVERSIGHT ACTIVITY, WAS NOT A LACK OF DILIGENCE ON THEIR PART. THAT WAS THE AGREEMENT THAT THEY HAD WITH THERANOS. THEY WERE WORKING AS INTENDED. THAT'S WHAT MR. BALWANI AND MS. HOLMES WANTED THEM TO DO. AND THAT CHOICE, THE CHOICE TO HIRE ABSENTEE LAB DIRECTORS WHO WERE NOT MORE ENGAGED REALLY SHOWS THAT THEIR COMPLAINTS WITH DR. ROSENDORFF WAS NOT ABOUT INATTENTION AND A LACK OF DILIGENCE. INSTEAD, IT WAS THE FACT THAT HE KEPT RAISING THESE ISSUES. HE WAS A PAIN TO THEM. THE FACT THAT HE KEPT SOUNDING THE ALARM ABOUT THESE UNRELIABLE TESTS MADE IT INCONVENIENT, AND WHEN HE LEFT, THEY REPLACED HIM WITH PEOPLE WHO WOULD NOT PRESENT THAT KIND OF PROBLEM.

MR. BOSTIC: NOTABLY, WHEN MS. HOLMES HIRED DR. DAS, IT'S NOT DISPUTED THAT THAT WAS IN RESPONSE TO AN INSPECTION THAT HAD GONE VERY BADLY FOR THERANOS. SO THAT WAS WHEN THE PREVIOUS APPROACH TO HIRING LAB DIRECTORS HAD ALREADY BACKFIRED AT THE COMPANY, AND THE COMPANY WAS DESPERATE FOR A CHANGE IN COURSE. WE'LL ALSO DISCUSS IN A FEW MINUTES THE FACT THAT WE CAN'T BLAME SCIENTISTS FOR THE FALSE STATEMENTS THAT MS. HOLMES MADE AT THERANOS BECAUSE SHE CONFIRMED FOR YOU UNDER OATH WHEN SHE WAS ON THE STAND THAT SHE KNEW THE KEY FACTS ABOUT WHAT THE TECHNOLOGY COULD AND COULD NOT DO. THAT CONFIRMS THAT SHE KNEW THAT THE STATEMENTS SHE WAS MAKING WERE FALSE AT THE TIME SHE MADE THEM. LET'S TALK BRIEFLY ABOUT LAWYERS WHO WORKED FOR MS. HOLMES AND THE COMPANY. THERE'S BEEN SOME MENTION OF GUIDANCE THAT MS. HOLMES GOT FROM LAWYERS AROUND TRADE SECRETS AND OTHER ISSUES. YOU SHOULDN'T PUT TOO MUCH STOCK INTO THAT BECAUSE YOU KNOW THAT MS.

HOLMES IGNORED CAUTIONARY ADVICE FROM LAWYERS, ESPECIALLY WHEN IT CAME TO THE HONESTY OF CLAIMS ABOUT THE THERANOS TECHNOLOGY. YOU'LL RECALL THIS EXHIBIT, 3981, WHERE A LAWYER EMAILS HOLMES DIRECTLY AND ADVISES THAT A LOT OF CLAIMS ON THE WEBSITE NEED TO BE REPLACED OR TONED DOWN, CLAIMS ABOUT HIGHEST QUALITY, OR THE HIGHEST LEVEL OF ACCURACY. THESE CLAIMS, ACCORDING TO THE LAWYER, WERE PROBLEMATIC. AND YET YOU KNOW FROM THE EVIDENCE AND THE TESTIMONY THAT THESE CLAIMS REMAINED ON THE WEBSITE. AND, EVEN MORE, MS. HOLMES CONTINUED TO DISTRIBUTE INVESTOR BINDERS IN PRESENTATIONS THAT WERE PEPPERED WITH THESE SAME CLAIMS, IGNORING THIS CAUTIONARY ADVICE FROM COUNSEL. BY THE WAY, ON THAT LAST TOPIC, YOU MAY RECALL THAT WHEN "THE WALL STREET JOURNAL" ARTICLE WAS ABOUT TO BE PUBLISHED, THE ARTICLE WRITTEN BY A JOURNALIST NAMED JOE RAGO, MS. HOLMES AND OTHERS AT THE COMPANY HAD AN OPPORTUNITY TO REVIEW THE TEXT OF THAT ARTICLE. I'LL GIVE YOU AN EXHIBIT NUMBER, WHICH IS 1090.

THAT IS AN EMAIL THAT YOU MIGHT REMEMBER WHERE AN EMPLOYEE NAMED JEFF BLICKMAN SENT MS. HOLMES DIRECTLY A LIST OF CONCERNING ISSUES THAT HE SAW IN THAT ARTICLE, AND THAT LIST INCLUDED MENTION OF IMPROVED ACCURACY IN THE DRAFT ARTICLE. THAT WAS SOMETHING THAT MR. BLICKMAN WAS CALLING OUT TO MS. HOLMES AS SOMETHING THAT MIGHT BE CONCERNING. THIS, COMBINED WITH THE EMAIL OF THE LAWYER, SHOWS YOU THERE WERE PEOPLE AT THERANOS WHO CARED ABOUT BEING ACCURATE AND TRUTHFUL IN REPRESENTATIONS ABOUT WHAT THE COMPANY CAN DO. THE PROBLEM IS THAT MS. HOLMES WAS NOT ONE OF THOSE PEOPLE, AND SHE WAS IN CHARGE. SHE WAS THE DECISION-MAKER. THE DEFENSE HAS ALSO RELIED MULTIPLE TIMES ON THE EXISTENCE OF FAVORABLE PATIENT REVIEWS EITHER AS EVIDENCE THAT THE TECHNOLOGY DIDN'T HAVE PROBLEMS OR THAT MS. HOLMES BELIEVED THAT THE TECHNOLOGY DIDN'T HAVE PROBLEMS.

THE DEFENSE ASKS YOU TO BELIEVE THAT THESE FAVORABLE PATIENT REVIEWS WHERE PATIENTS, FOR EXAMPLE, ARE GIVING THERANOS AND WALGREENS FOUR OR FIVE STARS FOR THEIR EXPERIENCE GAVE MS. HOLMES REASON TO BELIEVE THAT THERE WERE NO PROBLEMS WITH THE TECHNOLOGY AND THAT EVERYTHING WAS FINE. ASK YOURSELF WHETHER THAT'S CONVINCING. ASK YOURSELF WHETHER THE CEO OF A TECHNOLOGY COMPANY, SOMEONE WHO IS NAMED ON MULTIPLE PATENTS, SOMEONE WHO TOOK THE LEAD ON THE INVENTION SIDE AND THE TECHNOLOGY SIDE WOULD REALLY BELIEVE THAT CUSTOMER SATISFACTION RATINGS RELATED TO THE RELIABILITY OF A DEVICE OR THE APPROPRIATENESS OF THAT DEVICE FOR PATIENT CARE. A RESTAURANT WITH AN F RATING FROM THE HEALTH INSPECTOR CAN STILL HAVE A FOUR STAR YELP REVIEW IF THE CUSTOMERS DON'T KNOW ABOUT THE PROBLEMS IN THE KITCHEN. AND THAT'S EXACTLY WHAT WAS HAPPENING AT THERANOS.

IT'S NOT SURPRISING AT ALL THAT CUSTOMERS WHO HAD THE FINGERSTICK EXPERIENCE AT WALGREENS HAD A FAVORABLE EXPERIENCE AND WERE HAPPY WITH THAT EXPERIENCE. THERANOS PUT A LOT OF EFFORT INTO WHAT ITS FACILITIES AT WALGREENS LOOKED LIKE, HOW PEOPLE WERE TREATED. YOU KNOW FROM THE EVIDENCE THAT THE PRICES WERE LOW. THESE THINGS MADE PEOPLE HAPPY. THAT HAS NOTHING TO DO WITH THE ACCURACY OR THE RELIABILITY OF THE TESTS, AND YOU KNOW FROM THE OTHER EVIDENCE IN THE CASE THAT THERE WERE SERIOUS PROBLEMS THERE. AND MS. HOLMES HAD ACCESS TO THAT SAME INFORMATION, SO SHE WAS AWARE, TOO. AND IN 2014 WALGREENS WAS STARTING TO SEE THESE PROBLEMS AS WELL. WALGREENS WAS STARTING TO UNDERSTAND THAT THERANOS TECHNOLOGY COULDN'T DO EVERYTHING THAT IT HAD BEEN HELD OUT TO DO AND FOR THOSE SAME REASONS THE WALGREENS RELATIONSHIP WAS IN JEOPARDY.

MR. BOSTIC: SO YOU SHOULD NOT BELIEVE THAT MS. HOLMES WAS IGNORING THOSE FACTS, WAS IGNORING THOSE OBVIOUS TRUTHS SIMPLY BECAUSE PATIENTS WERE HAPPY WHEN THEY WERE WALKING OUT OF A WALGREENS SERVICE CENTER. YOU ALSO KNOW THAT THOSE CUSTOMER REVIEWS THAT WERE FAVORABLE ARE ONLY PART OF THE PICTURE HERE. YOU KNOW THAT IN MANY CASES PATIENTS OR DOCTORS CONTACTED THERANOS TO TALK ABOUT PROBLEMATIC TEST RESULTS THAT THEY HAD GOTTEN BACK, TEST RESULTS THAT WERE DEMONSTRABLY INACCURATE, TEST RESULTS THAT WERE DIFFERENT FROM WHAT THEY HAD SEEN BEFORE, TEST RESULTS THAT HAD GIVEN THEM CONCERNS ABOUT THE RELIABILITY OF THE THERANOS TESTS. LET'S TALK NEXT ABOUT THE WAY THE DEFENSE HAS RELIED ON PATENTS IN THIS CASE. AS YOU KNOW FROM THE TESTIMONY, SEVERAL PATENTS WERE AWARDED TO MS. HOLMES AND TO THERANOS AS A RESULT OF THE WORK DEVELOPING THE INTELLECTUAL PROPERTY OF THE COMPANY.

THERE'S BEEN A SUGGESTION BY THE DEFENSE THAT YOU SHOULD CONCLUDE FROM THAT THAT THIS WAS REAL TECHNOLOGY, THAT THE TECHNOLOGY MUST HAVE WORKED BECAUSE PATENTS WERE AWARDED COVERING THAT TECHNOLOGY. ALTERNATIVELY, YOU'RE ASKED TO BELIEVE THAT MS. HOLMES UNDERSTOOD THAT THE TECHNOLOGY WORKED BECAUSE THESE PATENTS HAD BEEN REWARDED, OR HAD BEEN AWARDED. BUT YOU KNOW FROM MS. HOLMES'S TESTIMONY THAT THE PROCESS FOR OBTAINING THESE PATENTS HAS NOTHING TO DO WITH THE RELIABILITY OF THE TECHNOLOGY, WITH THE ACCURACY OF THE ANALYZER. YOU KNOW THAT FROM HER TESTIMONY, SHE APPLIED FOR HER FIRST PATENT I THINK IT WAS A YEAR BEFORE SHE STARTED TO TRY TO BUILD A PROTOTYPE OF THAT DEVICE. THAT'S WHAT SHE TESTIFIED TO. EXHIBIT 9501 IS THAT FIRST PATENT.

SHE LATER STARTED WORKING ON A PROTOTYPE THAT COVERED PART OF THAT PATENT, BUT IF YOU LOOK AT THAT EXHIBIT -- AGAIN, THAT'S 9501 -- YOU'LL SEE THAT IT ALSO COVERS, BESIDES AN ANALYZER, A PILL THAT COULD BE SWALLOWED AND WOULD CONDUCT ANALYSIS WHILE IT WAS PASSING THROUGH THE SYSTEM. IT ALSO COVERED A PATCH THAT COULD BE WORN AND WOULD CONDUCT AN ANALYSIS WHEN IT WAS ATTACHED TO THE SKIN. THOSE PRODUCTS WERE NEVER DEVELOPED BY THERANOS. THEY WERE NEVER TAKEN TO THE PROTOTYPE STAGE. THEY WERE NEVER TURNED INTO REAL WORKING TECHNOLOGY BASED ON THE RECORD IN THIS CASE. THAT'S HOW YOU KNOW THAT THE PATENT PROCESS IS TOTALLY DIVORCED FROM THE IDEA OF A REAL WORKING DEVICE. SO THE FACT THAT MS. HOLMES OBTAINED PATENTS, THE FACT THAT THESE PIECES OF PAPER WERE ISSUED GIVING HER LEGAL RIGHTS OVER THIS INTELLECTUAL PROPERTY, SHE KNEW BETTER THAN ANYONE THAT THAT DID NOT MEAN THAT THE TECHNOLOGY ITSELF WAS VALID, AND THAT CERTAINLY WOULD NOT HAVE BEEN REASON FOR HER TO DISMISS THE NEGATIVE INFORMATION THAT SHE WAS HEARING ABOUT THE THERANOS TECHNOLOGY. YOUR HONOR, I'M ABOUT TO MOVE TO A DIFFERENT TOPIC, BUT THIS MIGHT BE A GOOD TIME FOR A BREAK.

MR. BOSTIC: WHAT DID THE EVIDENCE AT TRIAL SHOW ABOUT THESE NEXT GENERATION DEVICES? WELL, FOR ONE THING, YOU HEARD IN THE TESTIMONY AND SAW FROM THE DOCUMENTS THE NEXT GENERATION DEVICES -- AND HERE WE'RE TALKING ABOUT THE 4 SERIES, THE 4S, THE MINILAB, THE MONOBAY -- THIS FAMILY OF NEXT GENERATION DEVICES WAS PERPETUALLY NEXT GENERATION. IT WAS ALWAYS IN THE FUTURE. IT WAS ALWAYS ON THE HORIZON. IT NEVER BECAME THE CURRENT THERANOS TECHNOLOGY. IT WAS NEVER USED FOR PATIENT TESTING. THAT IS NOT IN DISPUTE. AND THE 4.0 AND THE 4 SERIES WAS NEVER USED FOR PATIENT TESTING BECAUSE IT WAS NEVER READY FOR PATIENT TESTING. THERANOS, INSTEAD, WAS USING THE PREVIOUS VERSION OF THE EDISON, THE 3.5, IN ITS CLINICAL LAB. NOW, AFTER THE FACT, THE DEFENSE IS ASKING YOU TO BELIEVE THAT ALL OF THE FALSE CLAIMS MS.

HOLMES MADE ABOUT THE TECHNOLOGY IN THIS CASE ALL OF THE TIMES THAT SHE SPOKE ABOUT WHAT THE THERANOS ANALYZER COULD DO, ALL OF THE TIMES SHE SPOKE ABOUT THE COMPANY'S ACHIEVEMENT AND ITS CAPABILITIES, THOSE WERE ACTUALLY REFERENCES TO A FUTURE DEVICE, NOT THE DEVICE THAT THE COMPANY WAS USING FOR ITS ONGOING CLINICAL TESTING. NOW, BEFORE YOU GIVE THIS VERSION OF EVENTS ANY CREDIT, ASK YOURSELVES WHY NOT A SINGLE LISTENER WALKED AWAY WITH THAT UNDERSTANDING. OF ALL OF THE PEOPLE THAT MS. HOLMES MADE THIS CLAIM TO, YOU HEARD FROM A VARIETY, PEOPLE WITH DIFFERENT BACKGROUNDS, PEOPLE WHO HEARD THESE CLAIMS IN DIFFERENT CONTEXTS. EACH OF THEM WALKED AWAY BELIEVING THAT MS. HOLMES WAS TALKING ABOUT THE COMPANY'S PRESENT DAY CAPABILITIES, THE ANALYZERS THAT THE COMPANY HAD DEVELOPED AND COMPLETED, THE ANALYZERS THAT THE COMPANY WAS USING FOR ITS ONGOING PATIENT TESTING. AND WHY WAS THAT? WELL, THINK ABOUT THE EVIDENCE IN TERMS OF WHAT MS.

HOLMES WAS ACTUALLY SAYING TO THOSE PEOPLE, WHAT THE WRITTEN MATERIALS SAID, WHAT YOU HEARD SHE SAID IN IN-PERSON CONVERSATIONS. IN CASES WHERE MS. HOLMES WAS TALKING ABOUT WHAT THE TECHNOLOGY COULD DO AND WHAT THERANOS WAS CAPABLE OF, HER CLAIMS WERE PRESENT TENSE CLAIMS. THEY WERE ALWAYS ABOUT THE ATTRIBUTES OF THE TECHNOLOGY, THE ABILITIES OF THE TECHNOLOGY WITH NO FORWARD LOOKING LANGUAGE. CLAIMS ABOUT THERANOS HAVING THE HIGHEST LEVELS OF ACCURACY, NOT SOME DAY HAVING THE HIGHEST LEVEL OF ACCURACY. CLAIMS ABOUT THERANOS TECHNOLOGY BEING ABLE TO DO THE ENTIRE RANGE OF TESTS, NOT HAVING THE GOAL TO SOME DAY HOPEFULLY BE ABLE TO DO THE ENTIRE RANGE OF TESTS. IT'S BECAUSE OF THE WAY MS. HOLMES CHOSE TO COMMUNICATE ABOUT THERANOS TECHNOLOGY THAT LISTENERS WALKED AWAY BELIEVING THAT THEY WERE HEARING ABOUT WHAT THE COMPANY COULD DO AS OF THE DAY THAT THEY WERE HEARING THESE STATEMENTS. IN PARTICULAR, THINK ABOUT THE INVESTOR PRESENTATIONS IN THIS REGARD.

YOU'VE SEEN THOSE NUMEROUS TIMES IN THIS CASE. I WON'T SHOW YOU THEM NOW AGAIN. BUT THINK ABOUT THE CLAIMS IN THOSE SLIDES THAT WERE FRAMED IN THE PRESENT TENSE, THE CLAIMS THAT I JUST MENTIONED ABOUT THE NUMBER OF TESTS THAT COULD BE DONE, LANGUAGE LIKE THERANOS CONDUCTS ANY TEST AVAILABLE IN CENTRAL LABORATORIES AND CAN PROCESS ALL SAMPLE TYPES. THINK ABOUT LANGUAGE LIKE THERANOS HAS THE HIGHEST LEVELS OF ACCURACY, AND THINK ABOUT WHETHER THERE'S ANYTHING ABOUT THAT LANGUAGE THAT WOULD GIVE EVEN A HINT TO SOMEONE THAT MS. HOLMES ACTUALLY WASN'T TALKING ABOUT PRESENT DAY CAPABILITY, THAT SHE WAS TALKING ABOUT SOME SPECULATIVE FUTURE EVENT THAT SHE HOPED WOULD OCCUR. THOSE INVESTOR PRESENTATIONS -- AND YOU WILL RECALL THAT THERE WERE DOZENS AND SOMETIMES HUNDREDS OF PAGES LONG -- DID SOMETIMES INCLUDE SOME FORWARD LOOKING STATEMENTS ABOUT THE EVENTUAL FOOTPRINT IN WALGREENS OR THE AMOUNT OF REVENUE THAT THERANOS HOPED TO GENERATE AT A CERTAIN POINT.

NOW, THOSE FORWARD LOOKING STATEMENTS ARE IN A DIFFERENT CATEGORY, AND THEY CAN STILL BE FRAUDULENT IF THEY'RE MADE WITH THE INTENT TO DECEIVE. BUT WE'RE NOT TALKING ABOUT THOSE NOW. WE'RE TALKING ABOUT PRESENT TENSE STATEMENTS THAT CLEARLY WERE MEANT TO CONVEY THE REALITY AS OF THAT DAY. THOSE INVESTOR PRESENTATIONS WOULD HAVE NEEDED TO BE COMPLETELY REWRITTEN IN ORDER TO BE HONEST IN LIGHT OF THE DEFENSE'S THEORY ABOUT THESE NEXT GENERATION DEVICES. ALL OF THAT LANGUAGE THAT IS IN THE PRESENT TENSE WOULD HAVE NEEDED TO BE CHANGED.

MR. BOSTIC: I SUPPOSE THEY COULD HAVE ADDED A NOTE AT THE BEGINNING OF THOSE INVESTOR SLIDE PRESENTATIONS SAYING, WARNING, ALL OF THE CLAIMS YOU'RE ABOUT TO SEE IN THIS PRESENTATION ARE NOT ABOUT THE COMPANY'S PRESENT DAY CAPABILITIES, BUT THEY'RE ABOUT A FUTURE GENERATION THAT IS NOT YET FINALIZED. THAT WOULD HAVE BEEN A WAY TO AVOID CONFUSION AND TO KEEP FROM MISLEADING PEOPLE. THAT WASN'T DONE. THAT CRITICAL PIECE OF INFORMATION WAS WITHHELD, AND AS A RESULT, EVERYONE LEFT THESE CONVERSATIONS, THESE INTERACTIONS WITH MS. HOLMES, BELIEVING THAT THEY HAD HEARD ABOUT WHAT THE COMPANY COULD DO THAT DAY. WHY WOULD THEY ASSUME ANYTHING ELSE? MS. HOLMES ASKED YOU TO BELIEVE THAT REPORTS FROM THERANOS EMPLOYEES SUPPORTED HER CLAIMS WITH RESPECT TO THE 4 SERIES AND WHAT IT WAS GOING TO BE CAPABLE OF. BUT WHAT WERE THOSE EMPLOYEES ACTUALLY TELLING HER?

IN HER TESTIMONY, SHE TOLD YOU, "BY 2009, 2010, WE HAD A BREAKTHROUGH IN WHICH WE FIGURED OUT HOW TO APPLY THE FORMULA NOT JUST TO ONE METHOD OF TESTS, BUT TO FOUR." AND IN RESPONSE TO HER LAWYER'S QUESTION SHE SAID THAT "THAT WORK THAT LED HER TO CONCLUDE THAT THE COMPANY WAS CAPABLE OF PERFORMING ANY BLOOD TEST ESSENTIALLY." LET'S LOOK AT AN IMPORTANT PIECE OF EVIDENCE THAT THAT BELIEF WAS SUPPOSEDLY BASED ON. THIS WAS INTRODUCED BY THE DEFENSE. THIS IS EXHIBIT 7098. THIS IS A PRESENTATION FROM FEBRUARY 2010 GIVEN BY A SCIENTIST NAMED IAN GIBBONS AT THERANOS, AND MS. HOLMES SAYS THIS INFORMATION WAS PART OF WHAT CONVINCED HER THAT SHE WAS NOW CLEAR TO REPRESENT TO OTHERS THAT THERANOS TECHNOLOGY WAS CAPABLE OF PERFORMING ANY TEST AND IN MAKING OTHER CLAIMS THAT SHE MADE. LET'S SEE WHAT THIS PRESENTATION ACTUALLY SAYS. PAGE 2, RIGHT AFTER THE COVER PAGE, CONTAINS AN OVERVIEW. AND NOTICE THAT IT REPEATEDLY USES FORWARD LOOKING LANGUAGE. THIS IS WHAT THE SCIENTIST IS TELLING MS.

HOLMES, "SYSTEM 4.0 WILL BE CAPABLE OF PERFORMING ANY MEASUREMENT REQUIRED," "IT IS ENVISAGED THAT SEVERAL DISTINCT MEASUREMENT TECHNOLOGIES WILL BE INCORPORATED," "THE SYSTEM WILL BE BROADLY BASED ON THE EXISTING CARTRIDGE," "THE NUMBER OF TOTAL MEASUREMENTS PER SAMPLE WILL BE INCREASED BY TWO TO THREE-FOLD." THIS IS HOW YOU WRITE SENTENCES ABOUT WHAT HASN'T HAPPENED YET. EVERYBODY KNOWS THIS. THIS WAS THE INFORMATION THAT MS. HOLMES WAS TAKING IN ABOUT THE NEXT GENERATION TECHNOLOGY, AND IT'S ONLY WHEN IT PASSED THROUGH KIND OF HER MIND AND WHEN SHE MADE A DECISION ABOUT HOW TO EXPLAIN IT TO OTHERS THAT IT TOOK ON THIS PRESENT TENSE CHARACTER, THAT IT BECAME AN EXAGGERATION IN THE FORM OF CLAIMS ABOUT WHAT THE COMPANY'S CURRENT TECHNOLOGY COULD DO. THAT'S NOT AN EXCEPTION IN THIS PRESENTATION. IT GOES ON TO TALK ABOUT SYSTEM REQUIREMENTS. NOTICE THAT SEVERAL KEY ASPECTS OF THE DEVICE ARE STILL TBD, OR TO BE DECIDED, INCLUDING OTHER CAPABILITIES.

AND AT THE BOTTOM THERE, IT SAYS OTHER CAPABILITIES TO BE DECIDED, BUT NOT LESS THAN SYSTEM 3.0. IN OTHER WORDS, THE PLAN FOR THE 4.0 WAS THAT IT WAS GOING TO BE BETTER THAN THE 3.0. DOES THAT SEEM CONCRETE ENOUGH TO YOU TO SUPPORT A GOOD FAITH BELIEF THAT THE COMPANY HAS TECHNOLOGY THAT CAN DO EVERYTHING THAT MS. HOLMES WAS CLAIMING? AND IMPORTANTLY, THIS PRESENTATION ALSO IDENTIFIED SOME PROBLEMS WITH THE 4 SERIES PLAN THAT THE COMPANY HAD APPARENTLY NOT YET SOLVED, THINGS THAT WERE GOING TO MAKE THIS PROJECT ESPECIALLY COMPLEX AND HURDLES THAT THE COMPANY WOULD NEED TO OVERCOME IN ORDER TO GET THERE. NOW, MS. HOLMES CONTINUED TO HEAR SOME POSITIVE REPORTS FROM SCIENTISTS AND ENGINEERS ABOUT THE DEVELOPMENT PROCESS FOR THE 4 SERIES, BUT AT NO POINT DID THEY TELL HER THAT THE 4 SERIES WAS READY FOR PATIENT TESTING. AT NO POINT DID -- DURING THE RELEVANT TIME PERIOD DID THERANOS ACTUALLY USE THE 4 SERIES FOR PATIENT TESTING, ALTHOUGH OBVIOUSLY THERE WOULD HAVE BEEN A DESIRE TO DO SO HAD THE SYSTEM BEEN READY. SO THESE REPRESENTATIONS OR THE INFORMATION THAT MS. HOLMES GOT FROM EMPLOYEES COULD NOT HAVE GIVEN HER A GOOD FAITH BASIS TO CLAIM THAT THE TECHNOLOGY WAS CURRENTLY CAPABLE OF DOING EVERYTHING. IF ANYTHING, THEY MADE HER OPTIMISTIC THAT THE LIES THAT SHE WAS TELLING COULD BE MADE TRUE BEFORE THEY HAD BEEN DETECTED.

MR. BOSTIC: SO YOU'RE REASONABLE TO INFER THAT THIS INFORMATION FROM SCIENTISTS AND ENGINEERS AT THERANOS GAVE MS. HOLMES SOME COMFORT IN SPREADING FALSE INFORMATION ABOUT WHAT THERANOS COULD DO AND WHERE THE TECHNOLOGY WAS AT BECAUSE SHE HOPED THAT BY THE TIME THAT ANYONE BECAME THE WISER, THE TECHNOLOGY WOULD HAVE CAUGHT UP TO HER REPRESENTATIONS, AND NO ONE WOULD EVER FIND OUT. AS IT TURNS OUT, THAT'S NOT WHAT HAPPENED. BUT FOR PURPOSES OF THE CHARGED OFFENSE AND HER INTENT TO DEFRAUD, A LIE IS A LIE AT THE MOMENT THAT IT IS MADE. IT DOES NOT MATTER WHETHER MS. HOLMES HAD THE INTENT TO MAKE THE LIE TRUE OR TO AVOID BEING FOUND OUT. THE PROBLEM IS IN MAKING THE MISREPRESENTATION ON THE DAY IT'S MADE. ALSO, REMEMBER IN THIS CONTEXT THE GOOD FAITH INSTRUCTION. WHEN THE COURT INSTRUCTS YOU ABOUT GOOD FAITH, AGAIN, THE COURT IS GOING TO TELL YOU THAT A GOOD FAITH THAT PREVENTS A CONVICTION IS A GOOD FAITH BELIEF IN THE TRUTH OF THE SPECIFIC MISREPRESENTATION CHARGED. HERE MS.

HOLMES'S OWN TESTIMONY PRECLUDES THAT FINDING. LET'S TAKE A LOOK AT THAT. HER TESTIMONY TELLS YOU IN ADDITION TO ALL OF THE OTHER EVIDENCE IN THE CASE, THAT SHE WAS AWARE DURING THE RELEVANT TIME PERIOD OF WHAT THE ANALYZER COULD DO AND WHAT IT COULDN'T DO. FOR EXAMPLE, TOWARDS THE BEGINNING OF HER TESTIMONY, MS. HOLMES WAS ASKED "HOW MANY SMALL SAMPLE ASSAYS DID THERANOS OFFER IN ITS CLINICAL LAB?" HER ANSWER WAS, "70 OR SO." SHE WAS THEN ASKED, "HOW MANY OF THOSE ASSAYS WERE OFFERED WHERE THE ANALYSIS WAS PERFORMED ON A MINIATURIZED THERANOS DEVICE?" SHE ANSWERED, "TWELVE." SHE WAS ALSO ASKED WHETHER SHE UNDERSTOOD THAT THE MINILAB WAS NEVER USED FOR PATIENT TESTING. SHE SAID SHE DID. SHE CONFIRMED ALSO THAT SHE WAS FAMILIAR WITH THE EDISON 3.5 DURING THE 2013 TIME PERIOD, AND IN 2014, AND IN 2015, AND THAT SHE KNEW WHAT THE EDISON 3.5 COULD DO AND WHAT IT COULDN'T DO. SO WHAT DOES THAT MEAN? THAT MEANS THAT WHENEVER MS.

HOLMES MADE A REPRESENTATION THAT WAS INCONSISTENT WITH THIS, SHE'S ADMITTING THAT THAT WAS A KNOWING MISREPRESENTATION. SHE KNEW THE TRUTH. SHE KNEW WHAT THE MINILAB COULD DO. SHE KNEW THE MINILAB WAS NEVER USED FOR PATIENT TESTING, THAT NEXT GENERATION DEVICE. SHE KNEW WHAT THE 3.5 WAS CAPABLE OF AND WHAT IT WAS NOT CAPABLE OF. SO WHEN SHE SAID THE THERANOS TECHNOLOGY CAN DO ANY TEST, WHEN SHE BOASTED OF GREATER ACCURACY, WHEN SHE CAUSED PEOPLE TO BELIEVE THAT THE EDISON WAS CAPABLE OF RUNNING THE ENTIRE RANGE OF TESTS, HERE'S THE TESTIMONY THAT TELLS YOU THAT SHE KNEW BETTER. SHE KNEW BETTER. AND OF COURSE SHE DID. SHE WAS THE FOUNDER OF THE COMPANY. SHE WAS NAMED ON MULTIPLE PATENTS. SHE DEVOTED SO MUCH ENERGY AND TIME TO THIS. OF COURSE SHE KNEW WHAT THE TRUTH WAS REGARDING THAT TECHNOLOGY. SO THIS THEME BY THE DEFENSE, THIS ARGUMENT THAT MS. HOLMES WAS ACTUALLY TALKING ABOUT A FUTURE DEVICE AND NOT CURRENT TECHNOLOGY IS ACTUALLY A SIGNIFICANT ADMISSION BY THE DEFENDANT.

IT MEANS THAT MS. HOLMES WAS INTENTIONALLY REPRESENTING AS A PRESENT ACCOMPLISHMENT SOMETHING THAT HAD NOT HAPPENED YET, AND THAT SHE KNEW THAT. THE DEFENSE IS PRESENTING IT AS IF IT EXCUSES MS. HOLMES'S CRIMINAL CONDUCT. BUT, IN FACT, THIS IS JUST A DESCRIPTION OF HOW THE FRAUD ACTUALLY WORKED. YOU HEARD FROM THE VICTIMS WHO TESTIFIED THAT MS. HOLMES'S APPARENT TECHNIQUE OF SPEAKING ABOUT NEXT GENERATION DEVICES AS IF THEY WERE ALREADY HERE WAS EFFECTIVE IN DECEIVING INVESTORS, IN DECEIVING OTHER PEOPLE WHO HAD CONTACT WITH THERANOS. IF THIS THEORY, IF THIS ARGUMENT IS LESS PERSUASIVE TO YOU, IT'S BECAUSE YOU HAVE ACCESS TO INFORMATION THAT THOSE VICTIMS DID NOT HAVE. UNLIKE THOSE VICTIMS, YOU'RE NOT RELIANT ON MS. HOLMES AS YOUR SOLE SOURCE OF INFORMATION ABOUT THE COMPANY. YOU SAT THROUGH A TRIAL WHERE YOU HEARD FROM THERANOS INSIDERS AND PEOPLE WHO COULD TELL YOU ABOUT THE DIFFERENCES BETWEEN THE 3 SERIES THAT WAS ACTUALLY A FINAL PRODUCT USED FOR PATIENT TESTING AND THE NEXT GENERATION DEVICES THAT WERE ALWAYS SPECULATIVE, ALWAYS HYPOTHETICAL, NEVER FINISHED. BECAUSE YOU HAVE THAT UNDERSTANDING, YOU HAVE A CLEAR FOCUS ABOUT WHETHER THIS DEFENSE IS ACTUALLY VIABLE AND YOU ARE ABLE TO SEE THROUGH IT. WHAT'S MORE, YOU KNEW THAT THERE WERE SERIOUS ACCURACY AND RELIABILITY PROBLEMS WITH THE 3 SERIES ANALYZERS THAT THERANOS APPARENTLY DID NOT KNOW HOW TO SOLVE.

MR. BOSTIC: THAT SHOULD MAKE YOU VERY SKEPTICAL THAT THE COMPANY WAS ON ITS WAY TO DEVELOPING A 4 SERIES DEVICE THAT WAS MORE COMPLICATED, MORE AMBITIOUS, THAT WAS GOING TO OVERCOME THESE PROBLEMS, AND IT SHOULD MAKE YOU SKEPTICAL OF ANY CLAIM THAT MS. HOLMES HAD A GOOD FAITH BELIEF IN THAT. THE COMPANY COULDN'T SOLVE THE ACCURACY AND RELIABILITY PROBLEMS PLAGUING THE MUCH SIMPLER 3 SERIES DEVICE. ANOTHER THEME THAT THE DEFENSE HAS RAISED RELATES TO INFORMATION THAT WAS SHARED WITH PEOPLE OTHER THAN VICTIMS IN THIS CASE. LET ME START BY REMINDING YOU THAT THIS CASE IS ABOUT DECEPTION OF THE SPECIFIC VICTIMS WHO FELL UNDER THE SCHEMES TO DEFRAUD INVESTORS AND PATIENTS. WE'RE TALKING ABOUT SCHEMES RELATING TO MULTIPLE INVESTORS AND MANY, IF NOT ALL, PATIENTS WHO PAID FOR THERANOS DEVICES OR PAID FOR THERANOS TESTS, AND THERE ARE SPECIFIC REPRESENTATIVES OF THOSE CLASSES WHO KIND OF UNDERLIE THE COUNTS THAT YOU'LL BE ASKED TO MAKE FINDINGS ABOUT. THAT'S WHAT THIS CASE IS ABOUT.

THIS CASE IS NOT TURNING ON INFORMATION THAT WAS SHARED WITH PEOPLE OTHER THAN THE VICTIMS OF THOSE SCHEMES TO DEFRAUD. LET'S TALK FIRST ABOUT INFORMATION SHARED WITH REGULATORS. THE DEFENSE HAS REMINDED YOU MULTIPLE TIMES THAT THERANOS PROVIDED INFORMATION TO THE FDA AND TO INSPECTORS THAT IT DID NOT PROVIDE TO THE VICTIMS IN THIS CASE, AND IT WOULD LIKE YOU TO CONCLUDE THAT THERANOS'S WILLINGNESS TO PROVIDE THAT INFORMATION TO THE AUTHORITIES SHOULD INDICATE TO YOU THAT THE COMPANY WASN'T TRYING TO KEEP THAT INFORMATION SECRET AT ALL. FIRST OF ALL, ASK YOURSELVES IF THAT'S WHAT THE EVIDENCE SHOWS. DOES THE EVIDENCE SHOW THAT THERANOS AND MS. HOLMES WERE CONSISTENTLY HONEST WITH REGULATORS? RECALL EXHIBIT 4047. THAT'S AN EMAIL FROM MS. HOLMES TO DANIEL YOUNG AND OTHERS ABOUT THE PATH THAT AN AUDITOR WAS GOING TO TAKE THROUGH THE THERANOS LAB DURING AN INSPECTION.

SHORTLY AFTER THAT, IN CONNECTION WITH THAT SAME INSPECTION, ON EXHIBIT 4316 DANIEL YOUNG EMAILS ADAM ROSENDORFF AND TELLS HIM NOT TO REMIND THE INSPECTOR ABOUT THE DOWNSTAIRS LAB. THAT'S THE LAB WHERE THE THERANOS-SPECIFIC DEVICES WERE KEPT. AND IN THAT EMAIL DAN YOUNG SAYS THAT IT'S SIMPLER IF THE INSPECTORS FOCUS ON THE UPSTAIRS LAB. EXHIBIT 1295 IS AROUND THAT SAME TIME PERIOD IN CONNECTION WITH THAT SAME INSPECTION, AND THAT'S AN EMAIL FROM MR. BALWANI, THE CODEFENDANT HERE, TALKING ABOUT AN AREA IN THE LAB THAT IS CORDONED OFF OR BLOCKED OFF DURING THIS INSPECTION. AND HE PROVIDES SOME SCRIPTING FOR LAB PERSONNEL TO RESPOND TO THE AUDITORS IF THEY'RE ASKED QUESTIONS ABOUT WHAT IS BEHIND THAT BARRIER. ONE IMPORTANT REASON WHY YOU SHOULD DISCOUNT THE FACT THAT MS. HOLMES PROVIDED INFORMATION TO REGULATORS IS THAT THE INCENTIVES ARE COMPLETELY DIFFERENT HERE.

OBVIOUSLY THE PURPOSE OF PROVIDING FALSE INFORMATION TO INVESTORS WAS TO MAKE THE COMPANY SEEM SPECIAL AND UNIQUE AND INNOVATIVE, TO ATTRACT THOSE INVESTORS AND MAKE THEM WANT TO GET ON BOARD AND INVEST THEIR MONEY IN A NEW COMPANY. WHEN IT COMES TO REGULATORS, HOWEVER, THE INCENTIVE IS THE OPPOSITE. SOMETHING NEW, SOMETHING INNOVATIVE, SOMETHING DIFFERENT, IT'S REASONABLE TO INFER, WOULD CAUSE GREATER SCRUTINY BY REGULATORS. BECAUSE OF THAT, IT WAS ACTUALLY TO THERANOS'S ADVANTAGE TO BE UP FRONT WITH THE REGULATORS ABOUT THE NORMAL SYSTEMS THAT IT WAS USING, THE COMMERCIALLY AVAILABLE ANALYZERS, THE FDA APPROVED PROCESSES, BY DISCLOSING THAT THERANOS WAS DOING THE SAME THING THAT ANY LAB WOULD DO, THE SAME WAY THAT QUEST WAS DOING IT, THE SAME WAY THAT LABCORP WAS DOING IT, THERANOS COULD EXPECT THAT THE FDA WOULD BE COMFORTED BY THAT AND WOULD NOT APPLY ADDITIONAL SCRUTINY. THE OPPOSITE IS TRUE FOR INVESTORS.

INVESTORS WOULD HAVE LITTLE INTEREST IN INVESTING IN A NEW LAB THAT WAS DOING THINGS THE OLD WAY. SO, AGAIN, YOU SHOULDN'T BE SURPRISED TO HEAR THAT MS. HOLMES WAS MORE FORTHCOMING WITH THE FDA WHEN IT CAME TO THINGS LIKE THE COMPANY'S USE OF THIRD PARTY DEVICES. SHE DIDN'T LIE TO THE FDA BECAUSE SHE DIDN'T NEED TO, AND ALSO BECAUSE HER CHANCES OF DECEIVING THEM WOULD HAVE BEEN REDUCED. RECALL FROM THE EVIDENCE DURING THE TRIAL THAT ORGANIZATIONS LIKE FDA AND CMS CAN INSPECT LABORATORIES WITH OR WITHOUT NOTICE, SO PROVIDING FALSE INFORMATION TO THEM ABOUT WHAT WAS IN THE LAB WOULD CARRY A MUCH HIGHER RISK AS COMPARED TO THE INVESTORS IN THIS CASE WHOSE ACCESS TO THE LAB WAS CONTROLLED BY NONE OTHER THAN THE DEFENDANT.

MR. BOSTIC: LET'S TALK NEXT ABOUT SOME OF THE EVIDENCE IN THIS CASE INVOLVING PHARMACEUTICAL REPORTS THAT WERE DOCTORED BY MS. HOLMES AND SHARED BY WALGREENS AND OTHERS. THE DEFENSE PRESENTED EVIDENCE THAT SOME OF THOSE REPORTS WERE LATER SENT TO THE COMPANIES WHOSE LOGOS APPEARED AT THE TOP, AND I THINK THE DEFENSE WANTS YOU TO CONCLUDE FROM THAT THAT MS. HOLMES HAD NO INTENT TO DECEIVE ANYONE BECAUSE SHE APPARENTLY WAS OKAY WITH CERTAIN INDIVIDUALS AT THOSE COMPANIES KNOWING THAT THOSE LOGOS HAD BEEN PLACED THERE. IT'S IMPORTANT TO KEEP IN MIND, THOUGH, THIS IS NOT A CASE ABOUT THE MISUSE OF LOGOS. THIS IS NOT A CASE ABOUT TRADEMARK MISAPPROPRIATION WHERE THE VICTIM IS THE PHARMACEUTICAL COMPANY. THE WRONG THING THAT HAPPENED THERE IS THAT THE LOGOS WERE USED TO DECEIVE A THIRD PARTY, WHETHER IT WAS A POTENTIAL INVESTOR IN THERANOS, WHETHER IT WAS WALGREENS, A POTENTIAL BUSINESS PARTNER. THAT IS WHERE THOSE DOCUMENTS WERE USED AS TOOLS. THAT'S THE WRONGFUL CONDUCT THAT YOU SHOULD FOCUS ON.

SO SENDING REPORTS BACK TO THESE COMPANIES IS NOT THE SAME THING AS REVEALING TO THE ACTUAL TARGETS OF THE DECEPTION, WALGREENS OR INVESTORS, THAT THOSE REPORTS HAD BEEN CREATED BY THERANOS AND THAT THE LOGOS HAD BEEN APPLIED BY MS. HOLMES HERSELF. AND SURE ENOUGH, WHEN MS. HOLMES WAS ASKED, "BEFORE GIVING THE DOCUMENT TO WALGREENS," AND THIS IS RELATING TO THE PFIZER REPORT, "YOU DID NOT TELL PFIZER YOU WERE ADDING ITS LOGO TO A DOCUMENT THAT THERANOS PREPARED; AM I RIGHT?" SHE SAYS, "I DON'T KNOW. I DON'T REMEMBER THIS PROCESS." THE FOLLOW-UP QUESTION IS, "AND YOU NEVER TOLD WALGREENS THAT YOU PUT THE PFIZER LOGO ON THIS?" "ANSWER: I'M SURE WE DIDN'T." LOOK AT THE CONTRAST BETWEEN THOSE TWO ANSWERS AND RECALL DURING MS. HOLMES'S TESTIMONY THERE WERE A LOT OF THINGS THAT SHE DIDN'T REMEMBER, THAT SHE WASN'T SURE ABOUT, THAT SHE DIDN'T KNOW. HERE IS SOMETHING THAT SHE IS SURE ABOUT.

WHEN ASKED WHETHER THEY TOLD WALGREENS THAT SHE PUT THE PFIZER LOGO ON THAT DOCUMENT, SHE ANSWERED THAT SHE'S SURE SHE DIDN'T. AND THE REASON SHE KNOWS SHE DIDN'T TELL WALGREENS THIS FACT IS BECAUSE IT WOULD HAVE REVEALED THE TRUTH THAT SHE WAS TRYING TO CONCEAL. LET'S LOOK AT THE METHOD THAT SHE USED THERE. THIS IS EXHIBIT 291, AN APRIL 14TH, 2010 EMAIL FROM MS. HOLMES TO REPRESENTATIVES OF WALGREENS ATTACHING THAT PFIZER REPORT AND TWO OTHERS. AND LOOK AT HOW SHE DESCRIBES THEM. SHE SAYS "DR. JAY, ALEX, "AS PER OUR DISCUSSION, PLEASE FIND THREE INDEPENDENT DUE DILIGENCE REPORTS ON THERANOS SYSTEMS." SHE SAYS THEY ARE FROM GLAXOSMITHKLINE, PFIZER, AND SCHERING-PLOUGH. WHEN SHE WAS ON THE STAND SHE ADMITTED THAT, IN FACT, OF COURSE THESE REPORTS WERE NOT FROM THOSE COMPANIES. THEY WERE FROM THERANOS. SHE MAINTAINED, HOWEVER, THAT THEY WERE INDEPENDENT IN SOME SENSE.

IT'S UNCLEAR HOW DOCUMENTS THAT WERE PREPARED OR ALTERED BY THERANOS, AND THEN DOCTORED TO APPEAR LIKE THEY WERE COMING FROM SOMEONE ELSE, COULD BE FAIRLY VIEWED AS INDEPENDENT. BUT I THINK YOU'RE IN A GOOD POSITION TO JUDGE WHETHER THIS WAS AN HONEST EMAIL OR NOT AT THE TIME THAT MS. HOLMES SENT IT, AND TO JUDGE HER INTENT IN MISCHARACTERIZING THESE DOCUMENTS WHEN SHE SENT THEM TO WALGREENS. THERE'S TRULY NO EXPLANATION HERE OTHER THAN AN INTENT TO DECEIVE. THERE'S NO REASON NOT TO BE UP FRONT ABOUT THE SOURCE OF THESE DOCUMENTS. THERE'S NO REASON TO SEND THEM IN THE FIRST PLACE UNLESS YOUR INTENT IS FOR THE RECIPIENT TO BELIEVE THAT THEY'RE READING THE OPINIONS OF THE COMPANIES' WHOSE LOGOS YOU HAVE PLACED AT THE TOP OF THOSE DOCUMENTS. LET'S TALK BRIEFLY ABOUT ANOTHER DEFENSE THEME, WHICH IS BRINGING FOCUS ON THE ACTIONS OF THE VICTIMS IN THIS CASE, SPECIFICALLY THE INVESTORS. YOU'VE HEARD IN THIS CASE FROM A SAMPLING OF INVESTORS.

EACH OF THEM TOLD YOU ABOUT THE FALSE AND MISLEADING INFORMATION THAT THEY RECEIVED FROM MS. HOLMES EITHER IN WRITTEN MATERIALS THAT SHE GAVE THEM, IN-PERSON INTERACTIONS, OR INDIRECTLY IN NEWS ARTICLES THAT MS. HOLMES HELPED SHAPE AND APPROVE. THE DEFENSE HAS FOCUSSED THROUGHOUT THE TRIAL ON THE DUE DILIGENCE EFFORTS OF THOSE INVESTORS, SOMETIMES IMPLYING OR INSINUATING THAT INVESTORS WEREN'T CAREFUL ENOUGH, THAT THEY DIDN'T TAKE ENOUGH STEPS TO CONFIRM WHAT MS. HOLMES WAS SAYING, THAT THEY WEREN'T SKEPTICAL ENOUGH. WHAT DOES THE LAW SAY ON THAT? HERE'S WHAT I EXPECT THE COURT TO INSTRUCT YOU ON THIS TOPIC.

MR. BOSTIC: THIS IS JURY INSTRUCTION NUMBER 26 THAT I EXPECT YOU'LL RECEIVE. NOTE THAT IT SAYS, "AN ALLEGED VICTIM'S NEGLIGENCE IS NOT A DEFENSE TO WIRE FRAUD." SO IN CASES WHERE YOU MIGHT FEEL THAT A GIVEN INVESTOR WASN'T CAREFUL ENOUGH, WASN'T SKEPTICAL ENOUGH, SHOULD HAVE TAKEN MORE STEPS, SHOULD HAVE DONE MORE INDEPENDENT INVESTIGATION, KNOW THAT THAT HAS NOTHING TO DO WITH YOUR VERDICT. KNOW THAT THE FOCUS, AS THE COURT WILL INSTRUCT YOU, IS ON THE DEFENDANT'S INTENT, AND A SCHEME TO DEFRAUD IS STILL A SCHEME TO DEFRAUD EVEN IF IT WOULD ONLY ENSNARE SOMEONE WHO IS LESS CAREFUL THAN THEY SHOULD BE. IT'S ALSO NOTABLE THAT IN THE COURSE OF THE TRIAL YOU ALSO HEARD FROM INVESTORS EVERYWHERE ON THE SPECTRUM OF CAREFULNESS AND SOPHISTICATION AND DUE DILIGENCE. ON THE ONE HAND YOU HAD CHRIS LUCAS WHO TESTIFIED THAT HE TRUSTED MS. HOLMES. HE TOOK HER WORDS AT FACE VALUE. HE HAD A HIGH LEVEL UNDERSTANDING OF WHAT THE COMPANY HAD DONE AND WHAT THE TECHNOLOGY COULD DO BASED ON CONVERSATIONS WITH HER.

AND HE, BASED ON THAT TRUST AND BASED ON HER REPRESENTATIONS, MADE THE DECISION TO INVEST. ON THE OTHER END OF THE SPECTRUM THERE'S PFM AND SOMEONE LIKE BRIAN GROSSMAN, A VERY SOPHISTICATED INVESTOR WHO TOOK MULTIPLE STEPS TO INVESTIGATE, TRY TO FIND CORROBORATION, HIRE EXPERTS AND GO THROUGH A PROCESS TO GET AS COMFORTABLE AS POSSIBLE WITH THE INVESTMENT IN THERANOS. AND THEN IN HIS OWN CATEGORY IS MR. EISENMAN WHO YOU HEARD MADE HIS BEST EFFORTS TO GET MORE INFORMATION ABOUT THE COMPANY, BUT WAS SHUT OUT BY MS. HOLMES AND MR. BALWANI DURING A CERTAIN TIME PERIOD. WHAT EFFECT DID THAT HAVE? THAT FORCED HIM TO RELY ON WHAT MS. HOLMES HAD TOLD HIM PREVIOUSLY, CONVERSATIONS LEADING UP TO AND THROUGH 2010, CLAIMS THAT SHE HAD MADE ABOUT THE TECHNOLOGY, AND CONTENT THAT HE SAW IN MEDIA THAT MS. HOLMES HAD APPROVED. REGARDING HIS FOCUS OF CERTAIN STATEMENTS OF HERS, I SUBMIT THAT THE BALANCE OF HIS TESTIMONY TELLS YOU THAT WHAT SHE TOLD HIM DID MATTER TO HIM.

HE TESTIFIED ABOUT HOW HE TOOK NOTES ABOUT HER CLAIMS. YOU SAW FOLLOW-UP EMAILS ASKING HER QUESTIONS ABOUT CARTRIDGE MANUFACTURING NUMBERS AND PROJECTIONS. OBVIOUSLY THOSE THINGS MATTERED TO HIM. I SHOULD ALSO POINT OUT, THOUGH, THAT YOU SHOULDN'T BE DISTRACTED BY DEFENSE ARGUMENTS ABOUT WHAT MATTERED TO A CERTAIN INVESTOR AT A CERTAIN TIME. WHEN YOU'RE INSTRUCTED ABOUT THE LAW, YOU'RE GOING TO HEAR ABOUT A CONCEPT CALLED MATERIALITY, WHICH RELATES TO THE KIND OF MISREPRESENTATION THAT CAN FORM THE BASIS FOR A WIRE FRAUD CONVICTION. AND YOU'RE GOING TO HEAR THAT MATERIALITY RELATES TO THE CAPACITY OF A CERTAIN STATEMENT TO INDUCE SOMEONE TO PART WITH MONEY. AND I'LL ASK YOU TO RELY ON THE COURT'S INSTRUCTION FOR THAT. BUT YOU'LL SEE THAT IT HAS NOTHING TO DO WITH WHAT WAS SUBJECTIVELY IN A VICTIM'S MIND AT A GIVEN TIME. IT'S AN OBJECTIVE STANDARD. IT RELATES TO THE TYPE OF CLAIM, THE TYPE OF STATEMENT, NOT TO THE SPECIFIC PERSON THAT IT WAS MADE TO.

SO WHAT YOU SAW IN THE EVIDENCE IS THAT THE LEVEL OF DUE DILIGENCE DOESN'T MATTER. IN THE END, THE INVESTORS WHO TESTIFIED WERE ALL ULTIMATELY FORCED TO RELY ON THE TRUTH OF THE REPRESENTATIONS THAT THEY HEARD FROM MS. HOLMES. THAT'S WHY YOU SHOULD ALSO DISCOUNT THE LANGUAGE IN THE CONTRACTS THAT TALKS ABOUT THE SPECULATIVE NATURE OF THE INVESTMENT OR INFORMATION RIGHTS AND THE LIKE. OF COURSE THESE WERE RISKY INVESTMENTS. THE INVESTORS KNEW THAT. AND, OF COURSE, THEY KNEW THAT THERE WAS SOME INFORMATION THAT MAYBE THEY WEREN'T GETTING FROM THE COMPANY. BUT YOU WON'T FIND ANY LANGUAGE IN THOSE CONTRACTS THAT EXCUSES THE COMPANY FOR KNOWINGLY PROVIDING FALSE INFORMATION. NOTHING IN THOSE CONTRACTS GAVE MS. HOLMES THE RIGHT TO KNOWINGLY MISLEAD THOSE INVESTORS. AT THE END OF THE DAY, THOSE INVESTORS WERE RELYING ON RECEIVING ACCURATE INFORMATION FROM MS. HOLMES AND NOT BEING INTENTIONALLY MISLED, AND THAT'S EXACTLY WHAT HAPPENED HERE. KEEP IN MIND ALSO ON THIS TOPIC THAT PATIENTS WERE REALLY AT A DISADVANTAGE HERE. IF YOU THINK THAT SOME INVESTORS WERE AT A DISADVANTAGE IN BEING ABLE TO COLLECT INFORMATION OR DO INDEPENDENT INVESTIGATION, KNOW AND REALIZE THAT PATIENTS WERE FAR WORSE OFF IN THEIR ABILITY TO FACT CHECK REPRESENTATIONS BY THE DEFENDANT OR DO ANYTHING OTHER THAN JUST RELY ON INFORMATION PUT OUT BY THE COMPANY. LET'S TALK NEXT ABOUT ANOTHER DEFENSE THEME RELATING TO CLAIMS OF TRADE SECRET PROTECTION.

MR. BOSTIC: YOU'VE HEARD EVIDENCE IN THE TRIAL ABOUT SECRETIVE PRACTICES AT THERANOS AND A LOT OF THE EVIDENCE AND TESTIMONY FROM VICTIMS HAS RELATED TO INFORMATION THAT WAS WITHHELD FROM THEM, FACTS THAT THEY DID NOT GET, THINGS THAT MS. HOLMES DID NOT TELL THEM. THE DEFENSE WOULD LIKE YOU TO BELIEVE THAT IN EVERY CASE, EVERY TIME INFORMATION WAS WITHHELD FROM A VICTIM, IT WAS SIMPLY A GOOD FAITH EFFORT TO PROTECT THE COMPANY'S TRADE SECRETS. THAT DEFENSE DOESN'T HOLD WATER, AND HERE'S WHY: FIRST OF ALL, THE EVIDENCE SHOWS YOU SOME CONTRADICTORY OR IRRATIONAL PRACTICES HERE. YOU SAW THAT THERANOS WAS QUITE AGGRESSIVE IN GETTING EMPLOYEES AND OTHERS TO SIGN CDA'S, OR CONFIDENTIAL DISCLOSURE AGREEMENTS. THAT WAS THE PRIMARY MECHANISM, OR A PRIMARY MECHANISM, THAT THE COMPANY USED TO PROTECT ITS CONFIDENTIAL INFORMATION. THE DRAFT POLICY THAT MS. HOLMES READ THAT WAS INTRODUCED INTO EVIDENCE SPECIFICALLY HIGHLIGHTED THE USE OF CDA'S AND NOTED THAT THAT WAS AN ACCEPTABLE APPROACH.

SO THERE WAS NO NEED TO DECEIVE INVESTORS OR ANYONE ELSE WHEN SIMPLY HAVING THEM ENTER INTO THESE AGREEMENTS WOULD HAVE BEEN ADEQUATE TO PROTECT THE COMPANY'S INTELLECTUAL PROPERTY. YOU SAW IN THE EVIDENCE THAT CRITICAL EVIDENCE WAS WITHHELD EVEN FROM THOSE UNDER CDA'S OR OTHER OBLIGATIONS TO KEEP SECRETS. FOR EXAMPLE, WALGREENS AND THE BOARD OF DIRECTORS, WHO HAD A DUTY AND AN INCENTIVE TO KEEP THERANOS'S SECRETS, STILL WERE NOT TOLD THE FULL EXTENT OF THE COMPANY'S RELIANCE ON THIRD PARTY DEVICES. THAT'S BECAUSE THIS WASN'T ABOUT PROTECTING TRADE SECRETS. A TRADE SECRET, AS YOU'VE HEARD, IS ABOUT PROTECTING HOW A BUSINESS DOES SOMETHING. IT'S NOT ABOUT HIDING WHAT A BUSINESS CANNOT DO. YOU HEARD MS. HOLMES TALK ABOUT HEARING FROM SENATOR NUNN ABOUT HIS EXPERIENCE ON THE BOARD OF COCA-COLA AND THE EFFORTS THAT THAT COMPANY TOOK TO PROTECT THE SECRET FORMULA FOR COKE. SO THE COKE FORMULA IS A CLASSIC EXAMPLE OF A TRADE SECRET.

IT'S SOMETHING THAT A COMPANY CAN DO, KNOWLEDGE THAT IT HAS THAT IT NEEDS TO PROTECT, OTHERWISE ITS COMPETITORS WILL BE ABLE TO COPY IT. THERANOS, THOUGH, WAS NO COCA-COLA. IF THERANOS WERE A SODA COMPANY, IT WOULD BE A COMPANY THAT COULD ONLY MAKE A FEW FLAVORS, AND FOR THE REST REPACKAGED SODA FROM ANOTHER COMPANY AND SOLD IT AS ITS OWN. THAT PRACTICE, THE PRACTICE OF TAKING A PRODUCT BY ANOTHER AND PASSING IT OFF AS SOMETHING THAT YOU COULD DO, IS NO TRADE SECRET. THAT'S NOT THE KIND OF THING THAT NEEDS TO BE PROTECTED BECAUSE IF A COMPETITOR FINDS OUT ABOUT IT, THEY'LL START DOING IT. IT'S A SECRET THAT NEEDS TO BE PROTECTED BECAUSE IF IT GETS OUT, IT WILL MAKE THE COMPANY LOOK BAD, IT WILL EXPOSE THE COMPANY AS A FRAUD, IT WILL MAKE THE COMPANY APPEAR LESS SPECIAL, AND THAT WAS WHAT MS. HOLMES WAS TRYING TO AVOID. AND THAT BRINGS US TO PROBABLY THE BIGGEST PROBLEM WITH THIS DEFENSE THEORY.

THE DEFENSE WANTS YOU TO FOCUS ON THE MODIFICATIONS THAT WERE MADE TO THIRD PARTY DEVICES AND VIEW THOSE AS TRADE SECRETS. BUT DON'T FORGET THAT MS. HOLMES ALSO WITHHELD INFORMATION ABOUT THE NONMODIFIED THIRD PARTY DEVICES THAT WERE IN USE AT THERANOS. THERE IS NO ARGUMENT, THERE CAN BE NO ARGUMENT THAT THE USE OF NONMODIFIED THIRD PARTY DEVICES WAS A TRADE SECRET. THAT'S SOMETHING THAT ANY LAB COULD DO. IT'S SOMETHING THAT YOU KNOW THAT QUEST AND LABCORP WERE DOING. THE PRACTICE OF BUYING A SIEMENS ANALYZER AND USING IT TO ANALYZE BLOOD IS NOT A TRADE SECRET. THAT'S WHAT EVERY LAB DOES. THE FACT THAT MS. HOLMES TOOK STEPS TO HIDE THAT, THE FACT THAT SHE DID NOT WANT INVESTORS AND THE PUBLIC TO KNOW THAT THE COMPANY WAS RELYING ON ANY NON-THERANOS DEVICES SHOWS THAT THIS IS NOT JUST ABOUT PROTECTING THOSE MODIFICATIONS. THIS IS ABOUT BUILDING UP THE EDISON.

THIS IS ABOUT LEAVING PEOPLE WITH THE FALSE IMPRESSION THAT THE EDISON IS A DO-IT-ALL DEVICE, AND THAT NOTHING ELSE IS NEEDED TO RUN THE LAB. YOU ALSO HAVEN'T HEARD ANY EVIDENCE THAT TRADE SECRETS CREATE A LICENSE TO LIE OR TO DECEIVE PEOPLE. TO THE EXTENT MS. HOLMES FELT THAT THERE WERE TRADE SECRETS THAT SHE NEEDED TO PROTECT, THERE WERE OBVIOUS, SIMPLE WAYS TO DO THAT THAT DIDN'T INVOLVE DECEPTION. FOR EXAMPLE, IN ANY CONVERSATION IF SHE WAS ASKED A QUESTION THAT SHE COULDN'T ANSWER IN HER MIND BECAUSE OF TRADE SECRET RESTRICTIONS, SHE COULD HAVE SIMPLY SAID, "I'M SORRY, I CAN'T GET INTO THAT BECAUSE OF TRADE SECRET PURPOSES." OR "I'M NOT WILLING TO TALK ABOUT" FILL IN THE BLANK.

MR. BOSTIC: THAT WOULD HAVE BEEN AN APPROACH THAT WOULD HAVE PRESERVED ANY TRADE SECRETS THAT SHE FELT NEEDED TO BE PRESERVED, WHILE AT THE SAME TIME AVOIDING THE PROBLEM OF CREATING A FALSE IMPRESSION IN SOMEONE'S MIND. THE REASON SHE DIDN'T TAKE THAT SIMPLE APPROACH IS BECAUSE CREATING THAT FALSE IMPRESSION WAS HER GOAL. THAT'S WHAT SHE WAS SETTING OUT TO DO. MR. DOWNEY HIGHLIGHTED FOR YOU THE FACT THAT DURING THE RELEVANT TIME PERIOD AND IN THE COURSE OF MS. HOLMES'S DEALINGS WITH THERANOS, SHE NEVER SOLD ANY OF HER SHARES AND DIDN'T OBTAIN ANY PERSONAL ENRICHMENT THAT WAY. YOU ALSO HEARD THAT THERE WAS A REASON WHY SHE DIDN'T SELL SHARES, AND IT RELATED TO HER CONTROL OF THE COMPANY. WHEN SHE WAS ON THE STAND, SHE TESTIFIED THAT SHE OWNED APPROXIMATELY 50 PERCENT OF THERANOS. IT CAME OUT ON CROSS THAT IT WAS SLIGHTLY MORE THAN 50 PERCENT, GIVING HER A CONTROLLING SHARE OF THE COMPANY.

YOU HEARD ABOUT HOW THE NATURE OF THOSE SHARES GAVE HER DISPROPORTIONATE VOTING POWER THAT ALLOWED HER TO DO WHAT SHE WANTED ESSENTIALLY IN THE COMPANY, INCLUDING FIRING THE BOARD, FIRING OTHERS, AND THAT POWER WAS DERIVED FROM THE SHARES THAT SHE HELD. SO IT IS REASONABLE FOR YOU TO INFER THAT ONE REASON WHY SHE DIDN'T LET GO OF ANY OF THOSE SHARES IS THAT SHE NEEDED TO HOLD ON TO THAT CONTROL OF THE COMPANY NOT ONLY SO THAT SHE COULD RUN IT THE WAY SHE CHOSE, BUT ALSO SO THAT SHE COULD KEEP CONTROL OF ACCESS TO INFORMATION THE WAY THAT THE EVIDENCE SHOWS THAT SHE DID. IN CONNECTION WITH THIS ARGUMENT, YOU SHOULD ALSO KEEP IN MIND WHAT I EXPECT THE COURT WILL GIVE YOU AS JURY INSTRUCTION NUMBER 27 THAT TELLS YOU IN CLEAR TERMS THAT IT IS NOT NECESSARY THAT MS. HOLMES MADE A PROFIT OR THAT ANYONE ACTUALLY SUFFERED A LOSS. SO YOU ARE NOT REQUIRED TO FIND THAT MS. HOLMES ACTUALLY MADE A FINANCIAL PROFIT FROM THIS FRAUD OR THAT IT WAS SUCCESSFUL IN ORDER TO CONVICT.

THAT IS NOT AN ELEMENT THAT THE GOVERNMENT HAS TO PROVE. THERE WERE ALSO BENEFITS FLOWING TO MS. HOLMES OTHER THAN MONEY. SHE HAD A SUBSTANTIAL SALARY TO BE SURE. BUT SHE ALSO BENEFITED FROM THE ATTENTION, THE ACCOLADES, THE FAME AND THE PROMINENCE THAT BEING THE CEO OF THIS SUCCESSFUL COMPANY BROUGHT HER. AND THERE'S ANOTHER REASON WHY SHE DIDN'T CASH OUT, AND THAT RELATES TO HER ULTIMATE VISION AND THE LEVEL OF WEALTH AND SUCCESS THAT SHE WANTED TO ACHIEVE, AND WE CAN SEE THAT IN THIS TEXT MESSAGE AT EXHIBIT 5387D, PAGE 19. AND IN NOVEMBER OF 2013 SUNNY TEXTS MS. HOLMES, "THEN LET'S BUILD THE TRUE AMERICAN EMPIRE. A MONOPOLY. OUR OBLIGATION TO U.S.A." AND MS. HOLMES RESPONDS, "THAT'S WHAT WE'RE DOING." IT'S NOT DISPUTED. MS. HOLMES APPARENTLY, EVIDENTLY, WAS NOT IN THIS SIMPLY TO GET MONEY. SHE WANTED TO BUILD THE TRUE AMERICAN EMPIRE.

SHE WANTED HER COMPANY TO BE A MONOPOLY, AND THE SUCCESS OF THE COMPANY TURNED OUT TO BE THE MOTIVE FOR THE CRIME THAT SHE COMMITTED, AND THAT'S IMPORTANT FOR YOU TO REALIZE. A FRAUD COMMITTED FOR THE SAKE OF A COMPANY'S SUCCESS IS STILL A FRAUD. IT DOES NOT NEED TO BE THE CASE THAT A DEFENDANT IS MOTIVATED BY PERSONAL ENRICHMENT. THAT'S NOT AN ELEMENT. AND WHAT'S MORE, YOU DON'T NEED TO MAKE ANY FINDINGS AS TO MOTIVE IN THIS CASE. WE TALK ABOUT MOTIVE BECAUSE IT'S HELPFUL FOR YOU TO UNDERSTAND WHY CERTAIN DECISIONS WERE MADE BY THE DEFENDANT, BUT YOU DON'T NEED TO MAKE ANY CONCLUSIONS ABOUT MOTIVE, YOU DON'T NEED TO AGREE ON WHAT MS. HOLMES'S MOTIVE WAS IN ORDER TO RENDER YOUR VERDICT. LET'S TALK NOW ABOUT SUNNY BALWANI. YOU HEARD IN MS. HOLMES'S TESTIMONY ABOUT HER EXPERIENCE IN HER RELATIONSHIP WITH MR. BALWANI. I WONDER IF ANY OF YOU FEEL LIKE THAT TESTIMONY MAKES YOUR JOB MORE DIFFICULT OR MORE COMPLICATED?

IT'S UNDERSTANDABLE IF IT DOES FOR A COUPLE OF REASONS: FIRST, WE KNOW THAT HEARING ABOUT SOMEONE HAVING GONE THROUGH A PAINFUL EXPERIENCE IS DIFFICULT. IT'S DIFFICULT FOR US TO SIT AND LISTEN TO SOMEONE TALK ABOUT SOMETHING PAINFUL OR HURTFUL THAT THEY HAVE BEEN THROUGH. IT'S NATURAL TO HAVE A REACTION TO HEARING SOMEONE TALK ABOUT SOMETHING LIKE THAT. IT'S NATURAL TO HAVE A STRONG REACTION TO SOMETHING LIKE THAT. SO THAT'S ONE WAY THAT HEARING THAT TESTIMONY MIGHT MAKE YOUR JOB AS JURORS MORE DIFFICULT. THE SECOND WAY IT MIGHT MAKE YOU FEEL THAT IT MAKES YOUR JOB MORE COMPLICATED IS THAT YOU MIGHT BE WONDERING HOW MS. HOLMES'S CLAIMS OF ABUSE AFFECTS YOUR ANALYSIS OF THE FRAUD IN THIS CASE, OR WHETHER IT AFFECTS THE ANALYSIS AT ALL.

MR. BOSTIC: A NATURAL STARTING POINT MIGHT BE TO TRY TO DETERMINE WHAT THE ANSWER IS TO THE FACTUAL QUESTION OF WHAT REALLY HAPPENED BETWEEN MS. HOLMES AND MR. BALWANI. IN THAT RESPECT, I'LL DIRECT YOU TO TWO JURY INSTRUCTIONS. THIS IS JURY INSTRUCTION NUMBER 4 THAT SAYS, "MS. HOLMES HAS TESTIFIED." AND IT DIRECTS YOU TO TREAT THIS TESTIMONY JUST AS YOU WOULD THE TESTIMONY OF ANY OTHER WITNESS. JURY INSTRUCTION NUMBER 9 MAKES IT CLEAR THAT YOUR JOB IS TO JUDGE THE CREDIBILITY OF WITNESSES AND IT TELLS YOU THAT "YOU MAY BELIEVE EVERYTHING A WITNESS SAYS, OR PART OF IT, OR NONE OF IT." AND IT INSTRUCTS YOU TO CONSIDER THINGS LIKE "THE WITNESS'S INTEREST IN THE OUTCOME OF THE CASE, AND WHETHER OTHER EVIDENCE CONTRADICTED THE WITNESS'S TESTIMONY." IN CHOOSING WHETHER TO BELIEVE PART OR ALL OF MS. HOLMES'S TESTIMONY, YOU SHOULD ADHERE TO THESE INSTRUCTIONS AND YOU SHOULD TAKE INTO ACCOUNT EVERYTHING YOU KNOW ABOUT THE FACTS OF THIS CASE.

THAT SAID, YOU NEED TO MAKE UP YOUR OWN MINDS ABOUT WHAT HAPPENED HERE, AND WHEN ALL IS SAID AND DONE, YOU MAY END UP FEELING LIKE YOU'RE NOT IN A POSITION TO MAKE CONCLUSIONS ABOUT EXACTLY WHAT HAPPENED BETWEEN THE DEFENDANT AND MR. BALWANI. THERE IS EXTENSIVE EVIDENCE IN THE RECORD OF THE CHARGED FRAUD IN THIS CASE. THERE IS MUCH LESS EVIDENCE ABOUT WHAT HAPPENED BETWEEN MS. HOLMES AND MR. BALWANI IN THEIR PERSONAL RELATIONSHIP. SO THIS IS A CRITICAL THING TO UNDERSTAND. YOU DO NOT NEED TO REACH A CONCLUSION REGARDING WHAT HAPPENED WITH MS. HOLMES AND MR. BALWANI IN ORDER TO RENDER YOUR VERDICT IN THIS CASE. IT'S IMPORTANT TO NOTE THAT THERE'S NO EVIDENCE HERE CONNECTING THOSE ALLEGATIONS OF ABUSE WITH THE ACTUAL CHARGED CONDUCT. EVEN MS. HOLMES HERSELF WHEN SHE WAS ON THE STAND DIDN'T MAKE THAT CONNECTION FOR YOU. THERE'S NO EVIDENCE REGARDING A LINK BETWEEN WHAT MR. BALWANI AND MS. HOLMES'S RELATIONSHIP WAS LIKE AND THE CONDUCT THAT SHE'S CHARGED WITH COMMITTING.

ON THE SCREEN YOU'LL SEE A PORTION OF MS. HOLMES'S TESTIMONY WHERE SHE WAS ASKED, "ARE YOU SAYING THAT MR. BALWANI FORCED YOU TO MAKE THE STATEMENTS TO INVESTORS THAT YOU MADE DURING THE COURSE OF THIS CASE?" AND SHE SAYS "NO." THIS IS HER LAWYER QUESTIONING HER. SHE'S ASKED, "ARE YOU SAYING THAT HE FORCED YOU TO MAKE CERTAIN STATEMENTS TO JOURNALISTS THAT WE'VE HEARD ABOUT DURING THE COURSE OF THIS CASE?" SHE ANSWERS, "NO." SHE ALSO DENIED THAT MR. BALWANI CONTROLLED HER INTERACTIONS WITH, FOR EXAMPLE, WALGREENS AND SAFEWAY EXECUTIVES. AND FINALLY, SHE DENIES THAT MR. BALWANI CONTROLLED HER INTERACTIONS WITH MEMBERS OF THE THERANOS BOARD IN THE RELEVANT TIME PERIOD. WHEN ASKED WHAT IMPACT HER PERSONAL RELATIONSHIP WITH MR. BALWANI HAD ON HER WORK AT THE COMPANY, SHE SAID SHE DIDN'T KNOW AND THAT SHE FULLY DIDN'T UNDERSTAND THE IMPACT. THAT WILL LEAVE YOU WONDERING WHY MS. HOLMES TESTIFIED ABOUT THOSE ALLEGATIONS WHEN SHE WAS ON THE STAND.

BUT IN THE ABSENCE OF EVIDENCE, IN THE ABSENCE OF ANY EVIDENCE LINKING THAT EXPERIENCE TO THE CHARGED CONDUCT, YOU SHOULD PUT IT OUT OF YOUR MIND, AND I'LL SHOW YOU AN INSTRUCTION THAT IS RELEVANT TO THAT IN A MOMENT. SO THE IMPORTANT QUESTION THEN IS, WHAT WAS MR. BALWANI'S ROLE IN THE CHARGED CONDUCT? HOW DID HIS INVOLVEMENT RELATE TO THE CRIME THAT IS AT ISSUE HERE? FIRST OF ALL, IT'S IMPORTANT TO NOTE THAT THE WITNESSES IN THIS CASE, FROM FORMER EMPLOYEES TO OUTSIDERS WHO DEALT WITH THERANOS, CONSISTENTLY TESTIFIED THAT THEY UNDERSTOOD MS. HOLMES WAS IN CHARGE OF THE COMPANY AND EVEN HAD AUTHORITY OVER MR. BALWANI. MS. HOLMES ADMITTED THAT IN HER TESTIMONY, THAT THERE WERE ASPECTS OF THE BUSINESS RELATIONSHIP WHERE MR. BALWANI DEFERRED TO HER, AND SPECIFICALLY SHE CONFIRMED THAT MR. BALWANI DEFERRED TO HER ON ASPECTS OF INVENTIONS AND DEVICES AT THERANOS. REMEMBER ESPECIALLY THAT THERE'S NO EVIDENCE IN THIS CASE THAT MR. BALWANI EVER EXPRESSLY ORDERED MS. HOLMES TO BE DISHONEST. IN FACT, THERE ARE EXAMPLES CITED DURING THE GOVERNMENT'S CLOSING OF INSTANCES WHERE MR. BALWANI EITHER CAUTIONED MS. HOLMES AWAY FROM BEING DISHONEST ABOUT SOMETHING, OR EXPRESSED CONCERN ABOUT AN UNTRUE STATEMENT THAT SHE HAD MADE. NOW, NO ONE IS SAYING THAT MR. BALWANI WAS A GOOD INFLUENCE IN THIS CASE. HE'S THE COCONSPIRATOR. HE WAS PART OF THE SCHEME TO DEFRAUD. BUT THE EVIDENCE SHOWED THAT MS. HOLMES DID NOT NEED ENCOURAGEMENT FROM MR. BALWANI IN ORDER TO BE DISHONEST AND DECEPTIVE.

MR. BOSTIC: THE EVIDENCE ALSO SHOWED THAT MR. BALWANI COMMUNICATED COMPLAINTS TO MS. HOLMES ABOUT THERANOS PRACTICES AND TECHNOLOGY. FOR EXAMPLE, MR. BALWANI WAS EVEN CRITICAL OF DAN YOUNG TO MS. HOLMES IN AUGUST 2014. IN RESPONSE TO AN EMAIL FROM DR. YOUNG ABOUT TRYING TO ADDRESS ANOTHER ONGOING PROBLEM WITH THERANOS'S ACCURACY AND RELIABILITY, MR. BALWANI REMARKS, "ALWAYS ANOTHER STUDY AFTER THE FACT." THIS IS A COMMENT BY MR. BALWANI EXPRESSING SKEPTICISM AND WEARINESS OF THE FACT THAT THEY KEEP HAVING THESE PROBLEMS AND DR. YOUNG ALWAYS PROPOSES ANOTHER STUDY THAT PURPORTS TO ANSWER IT. THIS WAS A PATTERN THAT MS. HOLMES OBVIOUSLY SAW. IT'S SOMETHING THAT SHE SHOULD HAVE REALIZED MEANT THAT THERE WAS A FUNDAMENTAL FLAW WITH THE TECHNOLOGY OF THE COMPANY. CONSIDER ALSO THE REASON WHY MS. HOLMES AND MR. BALWANI ULTIMATELY SEPARATED TIES. THE REASON WAS BUSINESS RELATED. WHEN MS. HOLMES REALIZED THAT MR.

BALWANI WAS NOT THE BUSINESS PERSON SHE THOUGHT, SHE ENDED THE RELATIONSHIP AND THEY PARTED WAYS. THE FACT THAT THAT RELATED TO SOMEBODY'S SKILLS AS A BUSINESS PERSON AND THE EFFECT HE HAD ON THE COMPANY AGAIN JUST SHOWS THAT MS. HOLMES WAS PRIORITIZING THERANOS. THAT WAS THE MOTIVE HERE FOR EVERYTHING SHE DID, INCLUDING THE FRAUD. WHEN IT COMES TO MR. BALWANI'S ROLE AND THE THINGS THAT HE DID, KEEP IN MIND THE FOLLOWING JURY INSTRUCTIONS: NUMBERS 19, 24, AND 25. THESE ALL RELATE TO WAYS THAT MS. HOLMES IS ACCOUNTABLE UNDER CERTAIN CONDITIONS FOR ACTIONS TAKEN BY A COCONSPIRATOR OR A PERSON WHO COMMIT THE CRIME AS A PRINCIPAL OR A COSCHEMER. SO AT THE END OF THE DAY, WHAT EFFECT SHOULD MS. HOLMES'S TESTIMONY ABOUT THE RELATIONSHIP HAVE ON YOU? WELL, AS I MENTIONED BEFORE, IT'S NATURAL IF, UPON HEARING SOMETHING LIKE THAT, YOU FEEL SYMPATHY FOR MS. HOLMES. IF YOU BELIEVE THAT THAT'S WHAT HAPPENED, IT'S NATURAL AND MAYBE UNAVOIDABLE FOR YOU TO FEEL THAT WAY.

THE MORE IMPORTANT QUESTION, THOUGH, IS WHAT DO YOU DO WITH THAT SYMPATHY? HOW SHOULD IT AFFECT YOUR DELIBERATIONS AND YOUR EXAMINATION OF THIS CASE? THE COURT'S INSTRUCTIONS HAVE AN ANSWER FOR YOU THERE. JURY INSTRUCTION NUMBER 1 TELLS YOU THAT YOU SHOULD "NOT ALLOW YOURSELF TO BE INFLUENCED BY PERSONAL LIKES OR DISLIKES, SYMPATHY, PREJUDICE, FEAR, PUBLIC OPINION, OR BIASES, INCLUDING UNCONSCIOUS BIASES." SYMPATHY, ACCORDING TO THIS INSTRUCTION, HAS NO PART IN YOUR DELIBERATIONS. THE QUESTION FOR YOU IS A FACTUAL ONE OF WHETHER MS. HOLMES COMMITTED THE CHARGED CRIMES, WHETHER THE ELEMENTS ARE SATISFIED. YOU SHOULD PUT ANYTHING BESIDES THAT ASIDE. LET'S TALK ABOUT ONE MORE DEFENSE THEME, WHICH IS CONDUCT THAT MS. HOLMES TOOK IN 2016 AND ONWARD. THE DEFENSE WANTS TO POINT TO THIS CONDUCT AS EVIDENCE OF MS. HOLMES'S MENTAL STATE DURING THE RELEVANT TIME PERIOD, WHEN THE FRAUD WAS TAKING PLACE. YOU SHOULD BE SKEPTICAL OF THAT.

THIS IS A TIME PERIOD AFTER "THE WALL STREET JOURNAL" EXPOSED FALSE INFORMATION THAT THE COMPANY HAD PUT FORWARD. EVERYTHING THAT MS. HOLMES AND THERANOS DID DURING THIS TIME PERIOD WAS PR, ORCHESTRATED BY A MULTI-BILLION DOLLAR COMPANY, IN CRISIS MODE. THE COMPANY KNEW THAT EVERYONE WAS WATCHING AND THE COMPANY WAS TAKING EFFORTS MOTIVATED BY THAT FACT WITH THE AWARENESS THAT THE WORLD WAS WATCHING AND IT HAD TO TRY TO REHABILITATE ITS REPUTATION AND GET ITSELF BACK ON TRACK. OPTIONS WERE CERTAINLY NARROWED IN THAT 2016 TIME PERIOD. BUT IF YOUR GOAL IS, AS IT SHOULD BE, TO JUDGE MS. HOLMES'S INTENT, THE MOST INFORMATIVE EVIDENCE COMES FROM THE RELEVANT TIME PERIOD BEFORE ALL OF THIS SCRUTINY WAS PLACED ON THE COMPANY. IT'S AXIOMATIC. IT'S MOST TELLING WHAT A PERSON DOES WHEN NOBODY IS WATCHING. AFTER "THE WALL STREET JOURNAL" ARTICLE, ALL EYES WERE ON THERANOS AND ACTIONS WERE TAKEN FOR APPEARANCES SAKE. JUDGE MS.

HOLMES'S INTENT INSTEAD BY WHAT SHE DID BEFORE SHE KNEW THAT THAT SCRUTINY WAS COMING. IN THIS CASE THE EVIDENCE IS STRONG THAT THE DECEPTION BY MS. HOLMES WAS DELIBERATE. IT'S HARD TO BELIEVE THAT THE FALSE STATEMENTS SHE MADE WERE UNINTENTIONAL OR MISTAKEN WHEN IT HAPPENED AGAIN AND AGAIN OVER YEARS AND WHEN THE RESULT WAS PUTTING HUNDREDS OF MILLIONS OF DOLLARS IN THE ACCOUNT OF HER COMPANY. YOU SAW AND HEARD THROUGHOUT TRIAL, LISTENING TO WITNESSES WHO HAD DEALINGS WITH HER, AND WHEN SHE WAS ON THE STAND THAT SHE IS AN INTELLIGENT, THOUGHTFUL, AND WELL SPOKEN PERSON.

MR. BOSTIC: AND INTELLIGENT PEOPLE UNDERSTAND THE DIFFERENCE BETWEEN WHAT IS TRUE AND WHAT IS NOT, BETWEEN WHAT IS HAPPENING TODAY AND WHAT MIGHT HAPPEN IN THE FUTURE. THOUGHTFUL PEOPLE LIKE MS. HOLMES THINK CAREFULLY BEFORE THEY SAY SOMETHING, AND WELL SPOKEN PEOPLE LIKE MS. HOLMES HAVE NO TROUBLE COMMUNICATING EXACTLY WHAT THEY MEAN TO COMMUNICATE. BASED ON THAT, YOU KNOW THAT WHEN MS. HOLMES AGAIN AND AGAIN INTENTIONALLY TOLD PEOPLE THAT THERANOS COULD DO SOMETHING THAT IT COULD NOT, THAT THAT WAS ON PURPOSE, AND THAT HER INTENT WAS TO DECEIVE AND TO CHEAT. YOU SAW TWO VARIETIES OF FALSE STATEMENTS IN THIS CASE. SOME WERE SIMPLE LIES. THE FACT THAT, OR THE CLAIM THAT THE THERANOS ANALYZER HAD BEEN USED IN THE BATTLEFIELD OR SENT TO AFGHANISTAN, THOSE THINGS SIMPLY WERE NOT TRUE. THERE WERE ALMOST MORE COMPLICATED HALF-TRUTHS THAT YOU SAW, AND WE'LL TALK ABOUT THOSE IN A MOMENT, BUT THOSE ARE PROPERLY PART OF YOUR EXAMINATION AS WELL. LET'S TALK BRIEFLY ABOUT THE WIRE FRAUD ELEMENTS.

AND NOTICE THE LANGUAGE AT THE BOTTOM OF THAT FIRST PARAGRAPH THAT SAYS "DECEITFUL STATEMENTS OF HALF-TRUTHS MAY CONSTITUTE FALSE OR FRAUDULENT REPRESENTATIONS." THAT MEANS THAT WHEN MS. HOLMES SAYS SOMETHING THAT IS ARGUABLY DEFENSIBLE AS TRUE, BUT STILL INTENDED TO GIVE A MISLEADING OR FALSE IMPRESSION, THAT CAN STILL FORM THE BASIS OF A WIRE FRAUD CONVICTION, AND YOU SAW MANY EXAMPLES OF THAT IN THIS CASE. NOTE ALSO THAT THE WIRE ITSELF, THE WIRE TRANSMITTAL NEED NOT BE FALSE OR MISLEADING. SO THE CONTENT OF THE WIRE NEED NOT BE FALSE, IT ONLY NEEDS TO BE IN FURTHERANCE OF THE SCHEME IN ORDER TO SATISFY THE ELEMENT. SOME OF THE BEST EXAMPLES OF HALF-TRUTHS IN THIS CASE AND INTENTIONALLY MISLEADING STATEMENTS WERE IN THE RECORDINGS THAT ROGER PARLOFF MADE. AND I'LL JUST REMIND YOU OF A COUPLE. SPEAKING TO MR. PARLOFF ABOUT THE RANGE OF TESTS OFFERED BY THERANOS, YOU'LL RECALL THAT IN ONE OF THE RECORDINGS MR.

PARLOFF TALKED ABOUT SEEING 600 TESTS AVAILABLE AT QUEST AND HE ASKED MS. HOLMES WHETHER HER PLATFORM REPLACED ALL OF THOSE, AND SHE SAID, "OUR PLATFORM CAN YIELD -- LET ME THINK OF THE BEST WAY TO SAY THIS. WE CAN DO ALL OF THOSE TESTS." SHE LATER SAID, "THE REASON I DIDN'T SAY REPLACE IS JUST BECAUSE OF THIS THEME OF -- WELL, YOU KNOW, WE ARE PROCESSING THE SAMPLES A DIFFERENT WAY." SHE'S SAYING THAT THERANOS HAS THE SAME CAPABILITIES AS QUEST BUT THAT THEY'RE PROCESSING THE SAMPLES A DIFFERENT WAY. THAT WAS NOT TRUE. THE COMPANY'S OWN TECHNOLOGY COULD DO FAR LESS, FAR FEWER THAN THE NUMBER OF TESTS THAT QUEST OFFERED, AND TO THE EXTENT THAT IT COULD MATCH THAT QUEST RANGE OF TESTS, IT WAS USING THE SAME METHODS, PROCESSING THE SAMPLES THE SAME WAY. SHE MADE SIMILAR CLAIMS TO MR.

PARLOFF SAYING THAT THE COMPANY HAD THE ABILITY TO DO TESTS THAT ARE NOT ON THE WEBSITE, EVEN BEYOND THE HUNDREDS OF TESTS THAT THE COMPANY LISTED ON ITS WEBSITE, SHE CLAIMED THAT THERANOS COULD DO EVEN MORE. ONE OF THE BEST EXAMPLES OF FALSE STATEMENTS BY MS. HOLMES WAS RELATED TO THE NEED FOR VENIPUNCTURE WHEN SHE WAS SPEAKING TO MR. PARLOFF. THIS IS IN EXHIBIT 5473B2, AND 5474AB2. IN THAT RECORDING YOU HEARD MR. PARLOFF ASK WHY THERANOS EVER DID VENIPUNCTURE? AND MS. HOLMES REPEATEDLY ANSWERS SAMPLE VOLUME AND THE NUMBER OF SAMPLES THAT THE COMPANY COULD PROCESS AT A GIVEN TIME. AT NO POINT DURING THAT CONVERSATION DID SHE TELL MR. PARLOFF THAT THE REASON VENIPUNCTURE WAS NECESSARY WAS THAT THE COMPANY'S OWN TECHNOLOGY COULD NOT DO THE RANGE OF TESTS THAT SHE WAS OFFERING. ONE EXAMPLE THAT YOU SAW DURING TRIAL RELATES TO THAT SAME INTENT BY MS. HOLMES TO CONCEAL THE NEED FOR VENOUS DRAWS FROM VIP'S. AND THIS WAS IN OCTOBER OF 2014. MS.

HOLMES WAS SHOWN THIS WHEN SHE WAS ON THE STAND. THIS IS A SITUATION WHERE POTENTIAL INVESTORS WERE COMING TO WALGREENS AND THERE WAS A CONVERSATION AT THERANOS, INCLUDING MS. HOLMES, WHERE CHRISTIAN WRITES, "ASSUMPTIONS HERE FROM EAH," MS. HOLMES, "ARE THAT WE MUST NOT DO VENOUS DRAW, AND WE CANNOT TELL THEM THAT THEIR ORDER PROMPTS VENOUS IF IT DOES." THERE'S MORE DISCUSSION ABOUT THE PLAN TO MAKE SURE THAT HAPPENS AND THAT THE NEED FOR VENOUS DRAW IS NOT DISCLOSED TO THESE VIP'S. AND NOTICE AT THE BOTTOM OF THE PAGE. IT SAYS, "IF THEY NOTICE MISSING TESTS ON THE RECEIPT, THEY MAY ASK THE WAG TECH ABOUT IT." AND IT SAYS, "CIARA WILL ALSO BE ABLE TO COME OUT OF THE DRAW ROOM ONCE CHECK-IN IS COMPLETE AND WELCOME THEM INTO THE ROOM AND DISTRACT FROM LOOKING AT THE RECEIPT."

MR. BOSTIC: THE EVIDENCE OF DECEPTION IN THIS EMAIL COULD NOT BE CLEARER. THIS IS OBVIOUSLY AN ATTEMPT BY MS. HOLMES AND OTHERS AT THERANOS TO MAKE SURE THAT VIP'S DON'T FIND OUT ABOUT THE COMPANY'S NEED TO DO VENOUS DRAWS. THEY WANT THESE VIP'S TO BELIEVE THAT THERANOS'S FINGERSTICK TECHNOLOGY CAN DO THE ENTIRE RANGE OF TESTS, AND FOR THAT REASON THEY'RE READY TO LAUNCH THIS ELABORATE SCHEME THAT INCLUDES A STAFF MEMBER COMING OUT TO DISTRACT THEM FROM LOOKING AT THE RECORD THAT WOULD REVEAL THE SECRET THAT THERANOS IS TRYING TO KEEP. SHORTLY AFTER BEING SHOWN THIS DOCUMENT, MS. HOLMES WAS ASKED BY HER LAWYER WHETHER SHE EVER TRIED TO CONCEAL VENOUS DRAWS FROM VIP'S AND SHE ANSWERED IN THE NEGATIVE. YOU SHOULD THINK STRONGLY ABOUT WHAT THAT ANSWER SAYS ABOUT HER CREDIBILITY AND JUDGE HER STATEMENTS ON THAT BASIS. WHY DID THIS FRAUD WORK? HOW DID IT WORK? A BIG PART OF IT WAS BORROWED CREDIBILITY. YOU SAW THAT. MS.

HOLMES BORROWED THE CREDIBILITY OF PHARMACEUTICAL COMPANIES, OF WALGREENS, OF THE BOARD AND THE ILLUSTRIOUS MEMBERS OF THE BOARD, OF THE PRESS, AND NOTABLE PUBLICATIONS LIKE "THE WALL STREET JOURNAL" AND "FORTUNE," AND THE MILITARY. BY ATTACHING HERSELF TO THESE INDIVIDUALS AND ORGANIZATIONS, SHE BOLSTERED THERANOS'S OWN CREDIBILITY, AND BY EXAGGERATING THOSE CONTEXTS, SHE CAUSED OTHERS TO BELIEVE THAT THERANOS MUST HAVE THE LEGITIMACY OF THESE OTHER ENTITIES. JUST BRIEFLY TO RESPOND TO WHAT MR. DOWNEY SAID ABOUT SOME OF THE CHARGED COUNTS IN THIS CASE. MR. DOWNEY NOTED THAT COUNT TEN REGARDING ERIN TOMPKINS INVOLVED A TEST THAT WAS NOT PERFORMED ON THERANOS TECHNOLOGY. THIS WAS THE HIV TEST. FIRST OF ALL, NOTE THAT THIS TEST, AS A REMINDER, DOES STATE A REACTIVE RESULT FOR THE HIV ANTIBODY. IN CONTRAST, YOU SAW THAT MS. TOMPKINS LATER HAD A TEST THAT CAME BACK NEGATIVE FOR THE HIV ANTIBODY. THERE'S NO WAY THAT THESE TWO RESULTS CAN BOTH BE CORRECT. AND YOU HEARD MS.

TOMPKINS TESTIFY THAT SHE'S NEVER BEEN DIAGNOSED WITH HIV. SHE'S NEVER BEEN TREATED FOR IT. SO THERE'S NO REASON THAT THE ANTIBODIES SHOULD BE PRESENT IN HER SYSTEM. THE THERANOS RESULT IS NOT ACCURATE. I'LL REMIND YOU OF EXHIBIT 13333 WHICH RELATES SPECIFICALLY TO PROBLEMS THAT THERANOS HAD WITH THE SECTION OF THE LAB THAT WAS INVOLVED IN RUNNING THE HIV TEST. SO THIS SHOULD REDUCE YOUR SURPRISE THAT MS. TOMPKINS RECEIVED AN INACCURATE RESULT. I'LL ALSO REMIND YOU THAT THIS SET OF TESTS FROM MS. TOMPKINS ALSO INCLUDED TESTS OTHER THAN HIV, INCLUDING GLUCOSE AS PART OF THE COMPREHENSIVE METABOLIC PANEL, AND THAT PANEL, MS. CHEUNG TESTIFIED, WAS RUN ON THERANOS TECHNOLOGY. SO ANY WIRE THAT THERANOS ENGAGED IN THAT RELATED TO A TEST RUN ON THERANOS TECHNOLOGY WAS IN FURTHERANCE OF THE GENERAL SCHEME TO DEFRAUD PATIENTS BASED ON MS. HOLMES'S KNOWLEDGE THAT THERANOS TECHNOLOGY WAS NOT SUFFICIENTLY ACCURATE AND RELIABLE FOR PATIENT TESTING.

SO THERE'S NO REASON WHY THIS IS NOT A VIABLE WIRE FRAUD COUNT ON WHICH YOU SHOULD RETURN A VERDICT OF GUILTY. THIS IS THE LAST INSTRUCTION THAT I'LL HIGHLIGHT WITH YOU. THIS IS THE STANDARD FOR REASONABLE DOUBT. THE DEFENSE SHOWED YOU A DIAGRAM OF AN ASCENDING STAIRCASE. I'LL JUST REMIND YOU THAT IT'S THE COURT'S JOB TO INSTRUCT YOU ON THE LAW. THIS IS WHAT I EXPECT THE COURT WILL GIVE YOU BY WAY OF INSTRUCTION. IT TELLS YOU THAT "REASONABLE DOUBT IS PROOF THAT LEAVES YOU FIRMLY CONVINCED THAT MS. HOLMES IS GUILTY." NOTE THAT "IT IS NOT REQUIRED THAT THE GOVERNMENT PROVE GUILT BEYOND ALL POSSIBLE DOUBT." IT ALSO SAYS THAT "A REASONABLE DOUBT IS A DOUBT BASED ON REASON AND COMMON SENSE AND IS NOT BASED PURELY ON SPECULATION." ACCORDING TO THAT STANDARD, YOU SHOULD FIND THAT MS. HOLMES COMMITTED THE CHARGED OFFENSES AND RETURN A VERDICT OF GUILTY IN THIS CASE. OVER THE YEARS OF THERANOS'S OPERATIONS, MS. HOLMES HAD MULTIPLE CHANCES TO DO THE RIGHT THING.

BUT AT SO MANY OF THE FORKS IN THE ROAD, SHE CHOSE THE DISHONEST PATH. HOW WOULD THINGS HAVE BEEN DIFFERENT IF MS. HOLMES HAD NOT HAD THE INTENT TO DECEIVE? WELL, SHE WOULD HAVE TOLD INVESTORS, WALGREENS REPRESENTATIVES, AND OTHER VIP VISITORS TO THERANOS THAT THE DEVICES SHE WAS SHOWING THEM IN CONFERENCE ROOMS WEREN'T ACTUALLY THE DEVICES THAT WERE GOING TO BE USED TO RUN THEIR TESTS, THAT THEIR TESTS WOULD BE RUN ON THIRD PARTY DEVICES FROM OTHER COMPANIES. IN INTERVIEWS WITH JOURNALISTS, IN REVIEWING ARTICLES, AND IN SENDING ARTICLES TO THIRD PARTIES LIKE INVESTORS, SHE WOULD HAVE AVOIDED PASSING ALONG KNOWINGLY FALSE INFORMATION.

MR. BOSTIC: SHE WOULD HAVE GIVEN GOOD FAITH REALISTIC REVENUE PROJECTIONS. SHE WOULD HAVE LISTENED TO LAB DIRECTORS AND OTHER EMPLOYEES ABOUT PROBLEMS WITH THERANOS TECHNOLOGY AND RESPONDED ACCORDINGLY AND STOPPED MAKING REPRESENTATIONS ABOUT THERANOS HAVING SUPERIOR ACCURACY OR THE HIGHEST LEVELS OF QUALITY. SHE WOULD HAVE RESPONDED TO THE DEPARTURE OF ADAM ROSENDORFF BY APPOINTING A COMPETENT AND ATTENTIVE LAB DIRECTOR TO MAKE SURE THAT THOSE PROBLEMS IN THE LAB WERE ADDRESSED. SHE WOULD HAVE REACTED TO PATIENT AND DOCTOR INQUIRIES ABOUT INACTION OR MISSING TEST RESULTS BY NOT WITHHOLDING INFORMATION OR GIVING THEM SCRIPTED ANSWERS THAT AIMED ONLY TO BOLSTER THE COMPANY'S REPUTATION, BUT BY BEING HONEST AND BY DISCONTINUING TESTS WHEN THAT NEEDED TO HAPPEN, AND MUCH SOONER THAT IT DID HAPPEN. THE LIST GOES ON AND ON. ON EACH OF THESE ISSUES MS.

HOLMES HAD A CHOICE AND SHE CONSISTENTLY PUT THE REPUTATION OF THE COMPANY OVER WHAT THE LAW REQUIRES AND WHAT PATIENTS AND INVESTORS WERE ENTITLED TO. YOU'VE HEARD HER SAY THAT SHE WISHES SHE HANDLED CERTAIN ISSUES DIFFERENTLY DURING HER TIME AT THE COMPANY. HOW SHOULD THAT AFFECT YOUR THINKING? WELL, YOU SHOULD REALIZE THAT SOMEONE IN MS. HOLMES'S POSITION NATURALLY MIGHT FEEL SOME REGRET ABOUT CHOICES THAT SHE MADE. IT WOULD BE STRANGE IF SHE DIDN'T GIVEN WHAT HAS RESULTED FROM THOSE CHOICES. BUT YOU SHOULD KEEP IN MIND THAT REGARDLESS OF HOW SHE FEELS TODAY ABOUT HER PAST CHOICES, IT'S THOSE CHOICES THEMSELVES THAT YOU NEED TO FOCUS ON IN DETERMINING WHETHER SHE COMMITTED A CRIME BACK THEN. BECAUSE MS. HOLMES MADE THE CHOICE TO DEFRAUD INVESTORS AND PATIENTS, AND BECAUSE SHE CONSPIRED WITH SUNNY BALWANI TO CARRY OUT THOSE SCHEMES, YOU SHOULD RETURN A VERDICT OF GUILTY ON ALL COUNTS. THAT'S THE ONLY VERDICT SUPPORTED BY THE EVIDENCE IN THIS CASE. THANK YOU.