In court papers unsealed late Friday, Elizabeth Holmes accuses former Theranos COO Sunny Balwani of psychological and sexual abuse
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Aug 31, 2021 • 16 hours ago • 3 minute read • 5 Comments
SAN JOSE — Theranos founder Elizabeth Holmes’ claims that she was abused by the company’s chief operating officer, who at the time was her boyfriend, could complicate jury selection in her highly anticipated fraud trial, legal experts said.
The in-person questioning of prospective jurors, up to roughly 170, is expected to begin on Tuesday in federal court in San Jose, California.
Holmes, 37, has pleaded not guilty to defrauding Theranos investors and patients by falsely claiming that the company had developed technology to run a wide range of tests on a single drop of blood.
Known for dressing in a Steve Jobs-style black turtleneck, Holmes herself has long been an object of fascination in Silicon Valley.
The meteoric rise and spectacular fall of Theranos turned Holmes from a young billionaire to a defendant who could face years in prison if convicted.
Her lawyers have said she may make the unusual move of taking the stand in her own defense, something that most defendants choose not to do because it opens them up to cross-examination by prosecutors.
Court papers submitted more than 18 months ago and unsealed late Friday revealed that Holmes had accused former Theranos COO Ramesh “Sunny” Balwani of psychological and sexual abuse.
Holmes’ lawyers said her “deference” to Balwani led her to believe allegedly false statements about parts of Theranos that he controlled, including a claim about a partnership with drugstore chain Walgreens.
The lawyers told U.S. District Judge Edward Davila, who is overseeing the case, last year that Holmes was “highly likely” to testify about these claims, court papers show.
Balwani denied allegations of abuse in a 2019 court filing. He is scheduled to be tried on fraud charges related to Theranos after the end of Holmes’ trial.
Lawyers for Holmes and Balwani did not immediately return requests for comment on Monday.
Before coming to court, 200 potential jurors filled out questionnaires about their familiarity with Holmes, who has been the subject of two books, two documentaries and a podcast. Thirty-three potential jurors were excused last week, including some who admitted bias.
Christina Marinakis, a jury consultant with IMS, a provider of expert and litigation consulting services, said prosecutors and Holmes’ lawyers have likely combed through potential jurors’ social media posts for their views about abuse, since they generally “don’t like to talk about these things in open court.”
Marinakis said jurors may be reluctant to admit to a tendency to view a claim of abuse as an “excuse” for Holmes’ conduct.
“They may fear they are going to be looked at as misogynists,” she said.
Holmes was 18 years old when she met Balwani, who is 20 years older than her, and started living with him around three years later, according to “Bad Blood,” Wall Street Journal reporter John Carreyrou’s best-selling book on the Theranos saga. The book chronicles the rise and fall of the company Holmes started at age 19, concluding that she was a “manipulator” whose “moral compass was badly askew.”
Tracy Farrell, a jury consultant who has worked on sexual assault cases involving clergy, said Holmes’ lawyers may favor younger jurors, especially women, who might question any attempt by prosecutors to show the abuse defense as “just another con.”
“It creates a kind of dissonance for women,” Farrell said. “We want to believe them.”
Marc Agnifilo, a New York lawyer, said Holmes’ case had some parallels with that of Martin Shkreli, a former client found guilty in 2017 of bilking investors in his hedge funds.
Before his trial, Shkreli gained notoriety for hiking the price of Daraprim, a drug that treats life-threatening parasitic infections, by more than 4000% in one day.
Shkreli “inspired this visceral negative reaction that was pretty challenging to keep out of the jury,” Agnifilo said.
Holmes’ lawyers, he said, should seek out “smart, open-minded jurors are not just going to buy into the government’s view of the facts.”
Reporting by Jody Godoy in San Jose, California; additional reporting by Nathan Layne in Wilton, Connecticut, and Brendan Pierson in New York; Editing by Leslie Adler and Noeleen Walder)
Tesla has promised to start selling cheaper models next year, days after a Reuters report revealed that the company had shelved its plans for an all-new Tesla that would cost only $25,000.
The news that Tesla was scrapping the Model 2 came amid a drop in sales and profits, and a decision to slash a tenth of the company’s global workforce. Reuters also noted increased competition from Chinese EV makers.
Tesla’s deliveries slumped in the first quarter for the first annual drop since the start of the pandemic in 2020, missing analyst forecasts by a mile in a sign that even price cuts haven’t been able to stave off an increasingly heated competition on the EV market.
Profits dropped by 50%, disappointing investors and leading to a slump in the company’s share prices, which made any good news urgently needed. Tesla delivered: it said it would bring forward the date for the release of new, lower-cost models. These would be produced on its existing platform and rolled out in the second half of 2025, per the BBC.
Reuters cited the company as warning that this change of plans could “result in achieving less cost reduction than previously expected,” however. This suggests the price tag of the new models is unlikely to be as small as the $25,000 promised for the Model 2.
The decision is based on a substantially reduced risk appetite in Tesla’s management, likely affected by the recent financial results and the intensifying competition with Chinese EV makers. Shelving the Model 2 and opting instead for cars to be produced on existing manufacturing lines is the safer move in these “uncertain times”, per the company.
Tesla is also cutting prices, as many other EV makers are doing amid a palpable decline in sales in key markets such as Europe, where the phaseout of subsidies has hit demand for EVs seriously. The cut is of about $2,000 on all models that Tesla currently sells.
By Charles Kennedy for Oilprice.com
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Divisions within the Bank of Canada over the timing of a much-anticipated cut to its key overnight interest rate stem from concerns of some members of the central bank’s governing council that progress on taming inflation could stall in the face of stronger domestic demand — or even pick up again in the event of “new surprises.”
“Some members emphasized that, with the economy performing well, the risk had diminished that restrictive monetary policy would slow the economy more than necessary to return inflation to target,” according to a summary of deliberations for the April 10 rate decision that were published Wednesday. “They felt more reassurance was needed to reduce the risk that the downward progress on core inflation would stall, and to avoid jeopardizing the progress made thus far.”
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Others argued that there were additional risks from keeping monetary policy too tight in light of progress already made to tame inflation, which had come down “significantly” across most goods and services.
Some pointed out that the distribution of inflation rates across components of the consumer price index had approached normal, despite outsized price increases and decreases in certain components.
“Coupled with indicators that the economy was in excess supply and with a base case projection showing the output gap starting to close only next year, they felt there was a risk of keeping monetary policy more restrictive than needed.”
In the end, though, the central bankers agreed to hold the rate at five per cent because inflation remained too high and there were still upside risks to the outlook, albeit “less acute” than in the past couple of years.
Despite the “diversity of views” about when conditions will warrant cutting the interest rate, central bank officials agreed that monetary policy easing would probably be gradual, given risks to the outlook and the slow path for returning inflation to target, according to the summary of deliberations.
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They considered a number of potential risks to the outlook for economic growth and inflation, including housing and immigration, according to summary of deliberations.
The central bankers discussed the risk that housing market activity could accelerate and further boost shelter prices and acknowledged that easing monetary policy could increase the likelihood of this risk materializing. They concluded that their focus on measures such as CPI-trim, which strips out extreme movements in price changes, allowed them to effectively look through mortgage interest costs while capturing other shelter prices such as rent that are more reflective of supply and demand in housing.
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They also agreed to keep a close eye on immigration in the coming quarters due to uncertainty around recent announcements by the federal government.
“The projection incorporated continued strong population growth in the first half of 2024 followed by much softer growth, in line with the federal government’s target for reducing the share of non-permanent residents,” the summary said. “But details of how these plans will be implemented had not been announced. Governing council recognized that there was some uncertainty about future population growth and agreed it would be important to update the population forecast each quarter.”
• Email: bshecter@nationalpost.com
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Shares in US tech giant Meta have sunk in US after-hours trading despite better-than-expected earnings.
The Facebook and Instagram owner said expenses would be higher this year as it spends heavily on artificial intelligence (AI).
Its shares fell more than 15% after it said it expected to spend billions of dollars more than it had previously predicted in 2024.
Meta has been updating its ad-buying products with AI tools to boost earnings growth.
It has also been introducing more AI features on its social media platforms such as chat assistants.
The firm said it now expected to spend between $35bn and $40bn, (£28bn-32bn) in 2024, up from an earlier prediction of $30-$37bn.
Its shares fell despite it beating expectations on its earnings.
First quarter revenue rose 27% to $36.46bn, while analysts had expected earnings of $36.16bn.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said its spending plans were “aggressive”.
She said Meta’s “substantial investment” in AI has helped it get people to spend time on its platforms, so advertisers are willing to spend more money “in a time when digital advertising uncertainty remains rife”.
More than 50 countries are due to have elections this year, she said, “which hugely increases uncertainty” and can spook advertisers.
She added that Meta’s “fortunes are probably also being bolstered by TikTok’s uncertain future in the US”.
Meta’s rival has said it will fight an “unconstitutional” law that could result in TikTok being sold or banned in the US.
President Biden has signed into law a bill which gives the social media platform’s Chinese owner, ByteDance, nine months to sell off the app or it will be blocked in the US.
Ms Lund-Yates said that “looking further ahead, the biggest risk [for Meta] remains regulatory”.
Last year, Meta was fined €1.2bn (£1bn) by Ireland’s data authorities for mishandling people’s data when transferring it between Europe and the US.
And in February of this year, Meta chief executive Mark Zuckerberg faced blistering criticism from US lawmakers and was pushed to apologise to families of victims of child sexual exploitation.
Ms Lund-Yates added that the firm has “more than enough resources to throw at legal challenges, but that doesn’t rule out the risks of ups and downs in market sentiment”.
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