On Thursday, a jury found Sunny Balwani, the former president and COO of the now-defunct and bankrupt blood-testing business Theranos, guilty on 12 charges of conspiracy and fraud against investors and clients.
- It’s the same judgment that Theranos founder and former CEO Elizabeth Holmes, who once dated Balwani, received in January.
- If you haven’t watched the TV series “Dropout”, it’s a detailed account of Elizabeth Holmes and Therano’s rise and fall as a company.
Why its Relevant: Balwani is less well-known than Holmes, but as the second in command and COO, he played a key role in creating the $1 billion scheme and straight-up lie that deceived both investors and clients.
- Holmes tried to shift the blame from herself stating that, although she knew the products that her company was making did not work, every failure was a step closer to success–shifting the narrative that she was not to blame. Which did not work.
- Read the Justice.gov report here — READ HERE
- Sunny Balwani claims that, even though he was the COO and President, he was also lied to and had no idea the company and its standing with a product. He tried to shift the blame, which failed as we know now, that he was merely a consultant in nature and did not have hands-on knowledge of the products or their stages. He also invested over $10,000,000 into the company to become COO and keep Holmes as CEO when the board voted her out.
- But prosecutors, who originally wanted to try the pair together, often used Balwani’s own words against him. For example, they presented a text message from Balwani to Holmes that read: “I am responsible for everything at Theranos.”
- One big difference between the trials, however, was that Balwani didn’t testify in his own defense.
Details: Balwani was convicted on all 12 counts brought against him, after nearly five days of jury deliberations. This includes a wire fraud charge related to a $100 million investment in Theranos from the family of former U.S. Education Secretary Betsy DeVos.
Holmes had been found guilty on four of seven counts, each of which connected to investors and carried a potential 20-year prison sentence.