WEBVTT 00:00.000 --> 00:05.000 JUDY WOODRUFF: Elizabeth Holmes, the founder of the former health technology company Theranos, 00:05.280 --> 00:10.280 faced cross-examination today for the first time in the fraud case against her. 00:10.720 --> 00:15.720 Federal prosecutors have called 29 witnesses over 11 weeks, in an attempt to reveal the 00:16.720 --> 00:21.720 alleged deception that led investors and patients to believe the company 00:21.760 --> 00:26.760 could conduct a range of tests using just a few drops of blood. The start-up collapsed in 2018. 00:28.960 --> 00:32.160 Rebecca Jarvis is the chief business, technology, 00:32.160 --> 00:37.160 and economics correspondent for ABC News and the host of "The Dropout," 00:37.280 --> 00:42.280 a podcast about Holmes and the ongoing trial, which is being held in San Jose. 00:43.760 --> 00:46.400 Rebecca Jarvis, thank you very much for being with us. 00:47.120 --> 00:52.120 The defense has only begun its side. The prosecution has spent, what, almost two months 00:54.320 --> 00:59.320 making this case or even longer. If you can, sum up what the prosecution was trying to do. 01:00.720 --> 01:05.720 REBECCA JARVIS, ABC News: Well, Judy, the prosecution has shown now in meticulous detail 01:06.080 --> 01:10.160 their allegations that Elizabeth Holmes was the one in charge of her company, 01:10.160 --> 01:15.160 Theranos, that she's the reason investors, patients and doctors were defrauded here. 01:15.760 --> 01:20.760 And they have shown us individuals, including investors, patients. We have heard from doctors. 01:22.320 --> 01:27.320 We have heard from scientists inside the company. We have heard from scientists outside the company, 01:27.360 --> 01:32.360 in meticulous detail, laying out this fraud and putting Elizabeth Holmes at the front of it. 01:32.400 --> 01:36.240 JUDY WOODRUFF: And she has just, as we said, taken the stand, 01:37.040 --> 01:42.040 I guess just before Thanksgiving. She's only - - we have only heard from her for a few days, 01:43.680 --> 01:48.680 but it's been dramatic, including her discussing being raped in college. 01:49.840 --> 01:53.744 Give us a sense of what she's saying and what the reaction's been. 01:53.744 --> 01:56.160 REBECCA JARVIS: Well, Judy, this has been explosive testimony. 01:56.160 --> 02:00.640 We have barely heard from Elizabeth Holmes since the charges were first brought and, 02:00.640 --> 02:05.200 frankly, have never heard some of the things she's been saying on the stand, 02:05.760 --> 02:10.480 and seen here in the way she's behaved on the stand, getting emotional, talking about, 02:10.480 --> 02:15.480 as you mentioned, being raped as a college student at Stanford, that being, according to her, one of 02:16.160 --> 02:21.160 the reasons she decided to drop out of Stanford and begin her blood testing company, Theranos. 02:21.440 --> 02:26.440 And she's also raised these allegations which we thought might come up at this trial against her 02:27.360 --> 02:32.360 former boyfriend and COO, Sunny Balwani, alleging years of abuse in the relationship, alleging 02:33.840 --> 02:38.840 it was emotional, it was physical, he dictated everything from her schedule to way that she ate. 02:40.480 --> 02:45.480 Now, these are claims he has denied vociferously. But these are claims that she raised. And they are 02:46.880 --> 02:51.600 something that certainly the jurors now are going to have to think about as they think 02:51.600 --> 02:56.400 about the bigger picture question, which is, did this woman intend to commit fraud? 02:56.400 --> 03:01.200 JUDY WOODRUFF: And what I have read, Rebecca, is that she's walking this fine line, because, 03:01.200 --> 03:06.200 on the one hand, she's saying she was heavily influenced by him over a period of time, but then 03:07.840 --> 03:12.840 she's now saying that he was not the reason she made these decisions as the head of the company. 03:13.920 --> 03:18.000 REBECCA JARVIS: Well, and that's a really important point that you raised, Judy, 03:18.000 --> 03:23.000 because she was asked point blank by her own attorney, did Sunny Balwani dictate what you said 03:24.000 --> 03:29.000 to investors? Did he dictate what you shared with Walgreens, your biggest customer, Walgreens 03:30.640 --> 03:35.640 being the place, the one place where Theranos tests got in front of patients in this country? 03:36.720 --> 03:41.720 So she said point blank, no, that he was not a part of those decisions. 03:41.760 --> 03:46.760 That is the fraud here. The fraud is not about the rest of these conversations and 03:46.880 --> 03:51.880 allegations, though they might make the jury feel more connected to her. 03:52.560 --> 03:56.640 Of course, they have sat in front of her now for many weeks. She's been there in the trial with 03:56.640 --> 04:00.880 her family sitting behind her, her partner. They have been told that she's a new mom, 04:00.880 --> 04:05.880 she has a newborn baby. And so they have really seen this woman for an extended span of time. 04:06.240 --> 04:10.960 JUDY WOODRUFF: And, Rebecca, of course, whatever the jury decides will have 04:10.960 --> 04:15.600 an enormous impact on her. She could face up to 20 years in prison. 04:15.600 --> 04:20.600 But it's also seen as a case important for the future of Silicon Valley. How so? 04:20.640 --> 04:25.280 REBECCA JARVIS: Well, it raises these questions about faking it until you make it. 04:25.280 --> 04:29.840 There are definitely people who believe that this is endemic to Silicon Valley, 04:29.840 --> 04:33.120 that this is the way people behave in Silicon Valley. And then there are those 04:33.120 --> 04:37.600 who think this is absolutely not the case. The bottom line here is, this is a woman who 04:37.600 --> 04:42.160 was able to raise more money than almost any other female founder. She became one of the 04:42.160 --> 04:46.800 wealthiest self-made women in the world. At one point, her company was worth $9 billion. 04:47.440 --> 04:52.440 So it does raise these questions about how -- what standards we hold founders to. What is important 04:53.840 --> 04:58.840 when a device like a blood testing device gets in front of anybody at a Walgreens store? 05:00.160 --> 05:05.160 JUDY WOODRUFF: And, finally, any sense of what we can expect next from the defense? 05:05.440 --> 05:10.160 REBECCA JARVIS: Well, we have certainly now heard this cross-examination today from the 05:10.160 --> 05:14.880 prosecution. And they have raised a number of text exchanges between Elizabeth Holmes 05:14.880 --> 05:18.240 and her former boyfriend and COO, Sunny Balwani. 05:18.240 --> 05:22.080 The defense is going to have to come back strong here, because the prosecution has 05:22.080 --> 05:27.040 presented a lot of very important evidence that really links -- especially today, 05:27.040 --> 05:31.280 that really links Elizabeth Holmes directly to the allegations of fraud. 05:31.280 --> 05:36.280 JUDY WOODRUFF: Rebecca Jarvis watching this riveting trial. 05:37.040 --> 05:39.200 Thank you very much, Rebecca. We appreciate it. 05:39.200 --> 05:44.200 REBECCA JARVIS: Thank you, Judy.