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SAN JOSE, California — At the height of its popularity in 2015, Elizabeth Holmes, the entrepreneur who founded the blood testing startup Theranos, was named Glamour’s “Woman of the Year”. Zaman put him on the list of 100 intellectuals. And Fortune, Forbes, Inc. and graced the covers of T Magazine.
Theranos crashed with the scandal three years later that failed to fulfill its mission to revolutionize the healthcare industry. But it changed the world in another way: It helped sour the media in Silicon Valley.
This point was brought up when journalist Roger Parloff, who wrote the Fortune cover story about Ms. Holmes and Theranos in 2014, testified Thursday in a federal courtroom in San Jose, California, where Ms. Holmes was present. He is on trial for 12 fraud charges.. Mr. Parloff said Ms. Holmes had made false statements to him, including the volume and types of tests Theranos might perform, and his work with the military and pharmaceutical companies.
Mr. Parloff said Theranos’ law firm, Boies Schiller, introduced him to the startup. The law firm had told him that “the real story is this remarkable company and its remarkable founder and CEO, Elizabeth Holmes,” she testified across the courtroom, looking directly at Ms. Holmes.
The discovery that Ms. Holmes, the tech industry’s most famous female entrepreneur, had misled the world about her company marked a turning point in the tech press and ended a decade of largely positive news. Reporters have snubbed into glossy articles that turn out to be stretching the truth about tech companies, covering up the negative consequences of their products, or abusing public trust in general.
“Holmes turns into the ‘You can’t buy what you sell’ fairy tale,” said Margaret O’Mara, professor at the University of Washington and Silicon Valley historian. “’It wasn’t as advertised, and we were convinced by it.’”
Understand the Elizabeth Holmes Case
Elizabeth Holmes, founder of blood testing startup Theranos, is currently on trial for two counts of electronic fraud and 10 counts of electronic fraud.
after the Wall Street Journal published disclosures With 2015 and 2016 showing that Theranos isn’t what it seems, the scope of tech companies has often begun to do more research.
reporters dug Facebook’s role in the 2016 presidential election, together Scandals at Uber and a series #MeToo accusations and worker revolts in tech companies. The change came with the realization that the tech industry was no longer the niche of idealistic computer geeks. It had become the dominant force in the global economy and needed greater reckoning.
With Ms. Holmes, now 37, on trial, the role of the media in the rise and fall of Theranos has been laid out in painstaking detail. Ms. Holmes used positive articles like Fortune’s. gain credibility with investorsProsecutors say Theranos poured $945 million into .
These investors were often featured in the media. Chris Lucas, a venture capitalist who has invested in his firm Theranos, said that reading the Fortune article made him “very proud of the situation, proud that we were involved, proud of Elizabeth.” Lisa PetersonManaging a $100 million investment in Theranos on behalf of the wealthy DeVos family, he directly removed the language from the Fortune article and turned it into a report he prepared.
The media was equally keen to embrace the brilliant Stanford University dropout story of Mrs. Holmes on her way to becoming the next Steve Jobs. There was a young, self-made female billionaire here. Compared to Einstein and Beethoven. He embraced the iconography, dressed as Mr. Jobs in a black turtleneck, and embraced an esoteric lifestyle, telling Mr. Parloff he was a vegan Buddhist who avoided coffee for green juice.
“There was a hunger for this kind of story and she took this opportunity and studied it very carefully,” said Ms. O’Mara.
Media adoration for Ms. Holmes has intensified so much that in 2015 Ramesh Balwani, known as Sunny, her business partner and boyfriend at the time, warned her that the hype was getting risky.
“FYI, I’m concerned about overexposure without the solids currently missing,” said Mr Balwani in a text message included in the court filings.
Miss Holmes ignored the warning. He wrote that the media apparently helped Theranos land a potential business deal, adding: “The more it works, the more haters will hate it.”
That same year, The Journal clarified Theranos’ technology did not do what the company claimed, prompting a surprise scrutiny by regulators that led to the company’s dissolution.
Theranos forcefully denied The Journal’s report. On CNBC, Ms. Holmes dismissed the article, saying “what happens when you try to change things”. He and Mr. Balwani filed a defamation suit based on text messages contained in court filings. Together with Theranos employees divine A curse from The Journal reporter John Carreyrou.
A short time later, Mr. Parloff long fix Theranos and Ms. To the Fortune article outlining how Holmes misled him. He also blamed himself for not giving more evasive and obscure answers to Mrs. Holmes’ questions.
In court, the exhibits revealed that Ms. Holmes had shown Mr. Parloff the same bogus verification reports – which showed that the pharmaceutical companies had approved Theranos’ technology, even though they had not – sent it to investors. Mr. Parloff also told Ms. Holmes that the military had used Theranos in Afghanistan, but the truth was so sensitive that she couldn’t publish it and couldn’t even ask General James Mattis, a Theranos board member. It turns out that Theranos machines were never used on battlefields.
“He was very concerned about trade secrets,” said Mr. Parloff.
Other outlets greeting Ms. Holmes followed Mr. Parloff’s mea culpa. forbes revised Ms. Holmes’ net worth, once estimated at $4.5 billion, has dropped to zero. attractiveness an update has been added She was named Woman of the Year after the Securities and Exchange Commission accused Ms. Holmes of fraud.
Ms. Holmes continues to fight the media even if she faces up to 20 years in prison if found guilty. Throughout the trial, his lawyers forced Mr. Parloff to limit his testimony. Although he had submitted, under subpoena, the recordings of his conversations with Ms. Holmes to both sides of the case, they filed a lawsuit to compel him to hand over all the report notes.
The purpose of this motion was to show Mr. Parloff’s “prejudice” and his “desire to blame Mrs Holmes for the mistakes he made in his first article”. A hearing in October.
A judge dismissed the request as a “fishing expedition”.
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