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Elizabeth Holmes fraud trial nears end after high stakes cross-examination

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  • Elizabeth Holmes
    American businessperson; a subject of an SEC investigation

Yahoo Finance legal reporter Alexis Keenan details the latest regarding former Theranos CEO Elizabeth Holmes' fraud trial.

Video Transcript

ZACH GUZMAN: Welcome back. The trial of the Theranos founder Elizabeth Holmes continuing and looking like her testimony might be wrapping up today. Potentially, the defense resting later this week, and for more on what we've been seeing in that trial, I want to bring on Yahoo Finance's Alexis Keenan, who's been tracking that one for us. And Alexis, when we look at the cross-examination here, you know, I mean, a lot of people maybe didn't expect Elizabeth Holmes to even be up there on the stand, but what have you made of what we've seen?

ALEXIS KEENAN: Yeah, Zach, you're right, and look, she's surprised a lot of criminal defense attorneys, seasoned criminal defense attorneys, and also, even the prosecution, who projected that she would not take the stand in some early court documents. So taking her defense in her, her own words really here is super high-stakes. The charges that Elizabeth Mahomes is facing carry 20 years, potentially, up to 20 years in prison. That is criminal fraud and criminal conspiracy charges.

Now, today could be the final day of her cross-examination by US Assistant Attorney Robert Leach. She's been on the stand testifying for several days in that cross-exam. Now, the trial is being held in San Jose's federal courthouse. It's now in the 14th week. Her early testimony with her own prosecu-- with her own attorney rather, that started, already, now several weeks ago.

Now, the end of Holmes' testimony, it really means that her case could be nearing its conclusion, which would mean it would then, eventually, very close from then, be handed over to a jury, possibly, as early as the end of this week. But it's still really too early to know that. Her defense team-- Holmes' defense team has listed 200 plus potential witnesses on their witness list, so we could hear from others. It doesn't necessarily mean that the end of her case will end with Elizabeth Holmes' own words.

Now, it's going to come down here though to whether or not the jurors believe that Holmes intended to lie or omit information about the capabilities of her once very, very popular and very promising, at one time, blood testing company Theranos. What they believe about whether she intended to admit or lie about her company-- that's what's really at stake here. And they would have to believe that she made those omissions, purported omissions, or lies in order to take money from investors or from paying patients.

So she is facing nine counts of wire fraud here, two counts of conspiracy. But bottom line here, the prosecution has a really tough job, but so does Elizabeth Holmes. And so far, on the stand, she's faced a lot of tough cross-examination that I'm sure she's hoping that her attorneys can clean up a bit when they come back in. They'll get the chance to ask her questions again, as well, Zach.

ZACH GUZMAN: Yeah, and I guess, you know, too, when it comes down to the defense, you kind of discussing it around 11 counts of wire fraud and conspiracy, you got, you got to prove, I guess, that you know-- it seems like they've been leaning in on the idea that a lot of people have been guiding her and, I guess, misguiding her around some of this, and that she, she didn't kind of have that intent to mislead anybody here, which seems rather important to how the jury might decide this case. I mean, what have you seen, maybe, standing out in the way that the defense could be holding up based on the facts?

ALEXIS KEENAN: Yeah, so the tact that Holmes took here was to say, look, I was the CEO and yes, the buck stops with me, but I relied on others, and particularly, other executives at the company. She talked a lot about former laboratory directors, and the defense did show that they did have communications with Holmes saying that, look, here are some glowing reports. Here are some positive things about what our technology, what this blood testing technology is doing, so she said, she relied on those representations.

She also talked a lot about relying on the representations of her former CEO Sunny Balwani, who was also her longtime boyfriend. She had a couple of different ways of pushing some blame over to Balwani. One was that as an executive, she relied on him, including in dealings with potential partners and one-time partner Walgreens, a potential partner, another one Safeway, and others. But also she brought about abuse allegations, saying that he was physically abusive and emotionally abusive, and that that really impacted the leadership that she was trying to give to her company.

Whether or not jurors will buy that-- big question. Also, I'm really a little bit surprised here that we haven't seen too much-- and granted, I'm not sitting in the courtroom anymore, I was-- but we haven't seen her really bring out the fact too strongly that she is a new mother. Certainly, a group of 12 jurors, no matter their background would take that into consideration. So I'm listening to see-- will that come out? That she has this brand new baby, and get jurors thinking about what would be the ramifications of trying to go to prison and live out a sentence when she has this infant, new to the world. So we'll see. There's still a lot of testimony to go here, Zach.

ZACH GUZMAN: All right, Alexis Keenan, bringing us the latest there. Appreciate that.

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