Thread by @doratki

Good morning from San Jose! It’s day 8 of US v Elizabeth Holmes and there’s a relatively short line to get in the courthouse - mostly press. Today prosecutors are expected to wrap direct of ex-Theranos lab director Adam Rosendorff, followed by cross. Standby for live tweets…

Judge Davila is on the bench. He says they received an email from an alternate juror. They're going to bring her in to discuss the "issues she presents." It sounds like she has a job starting next month, and she may be excused.

The judge also notes that trial is going to go until 3-4 today and tomorrow, but will break early - around 1 p.m. - Friday. We're taking a short break to wait for the jury to arrive.

The alt juror is in the courtroom and says she's planning to start a new job. Judge: "I don't want to interfere with your employment opportunity at all, but I'd like you to talk to them, explain current public service situation, and see if perhaps they can defer your employment."

The alt juror said she'll talk to her new employer and see if her new job can work around the trial schedule, and she'll let the judge know. (It sounds like a part time job.)

Ex-Theranos lab director Adam Rosendorff is back on the stand, and John Bostic is up for the gov't with some more q's on direct. He's got at least an hour to go before handing off the witness to the defense team.

Bostic points to an Aug 24 2014 email chain in which a phlebotomist raised a concern about a patient's inaccurate Theranos PT/INR test, which evaluates the ability to form blood clots. The patient developed bruises and the doc realized the tests were wrong after a venous draw.

The doc's concern was sent to Balwani and Daniel Young. Young told Balwani "As I mentioned I had some concerns a few weeks back" about the tests. Balwani asked if Young had concerns about other assays, and Young replied yes: hCG, testosterone, VB12,
TSH, CO2, Glucose and K.

Moving on to another topic, Rosendorff says he expressed his serious concerns to Holmes and Balwani about Theranos' proficiency tests in mid-2014 during
a meeting. "Everybody was aware that we did not have a plan in place," he said.

Rosendorff: "I left the meeting still uncomfortable. I felt management was paying lip service to the issue," and they wouldn't give him the resources he needed for Theranos' proficiency tests.

In another email chain from Feb 2014, Balwani wrote Rosendorf that "our validation against immulite has been excellent in the past. It is these [proficiency test] samples that are off." But Rosendorff says he disagreed with Balwani's take.

In a Feb 2014, Rosendorff wrote an email saying Theranos need to do an "alternate assessment protocol," or APA, for proficiency testing...

Elizabeth Holmes replied to Rosendorff: "We engaged top counsel on this some time ago, sunny will debrief you tomorrow - It is critical that no one is guessing on matters like these. This is why we retained the best regulatory counsel in the country."

Balwani also replied to Rosendorff: "I’m extremely irritated and frustrated by folks with no legal background taking legal positions and interpretations on these matters and junior CLIA and non-CLIA personnel challenging our CLIA SOPs. This must stop..."

Balwani's email went on: "...These past few days we have wasted so much time talking to people outside of CLIA who have come to us to share that our PT on Vitamin D on Edison has failed. These PT samples should have never been run on Edison to begin with..."

Balwani: " We should follow our current SOPs regarding [proficiency testing]... No personal opinions. Right now every CLS or TS or GS considers themselves and regulatory expert and this culture must be nipped in the bud." Rosendorff again said he disagrees with Bawlani's take.

In May 2014, Rosendorff emailed Theranos VP Chinmay Pangarkar for updates on Edison proficiency tests and BCC'ed his personal email on the exchange to protect himself in case gov't investigation. "I had done everything I could from a laboratory perspective," he said.

Rosendorff says when he served as Theranos' lab director, he wasn't aware Holmes' brother, Christian Holmes, was approving patient blood redraws. Rosendorff notes that anyone making a clinical decision has to be on CMS roster - a 'form 209' - and Christian wasn't on that roster.

Rosendorff says during the CLIA inspection in November 2013, Sunny Balwani said no one was allowed to go into or out of the Normandy lab (where the Edison devices were) even though the SOP is "to show inspectors what they asked for."

Rosendorff testifies that Young said they shouldn't mention Theranos' other lab with modified Siemens blood testing devices unless inspectors "bring it up."

Rosendorff said in October 2014, Theranos was receiving many doctor complaints and the number of issues "reached a crescendo for me," and so he quit the next month.

Before quitting in Nov 2014, Rosendorff told Christian Holmes he's "going to pass" on defending Theranos' test results when a clinician asked to speak to Theranos' lab director.

Christian Holmes replied to Rosendorff that "passing" on talking to a clinician re interpreting results "is not an option." Elizabeth wrote her bro privately "You handled this excellently."

Rosendorff says he was concerned Theranos was not disclosing to patients the method used to run tests or whether the tests were drawn venously or via fingerprick, while management "made it very clear what the messaging should be" - that he should defend the tests' accuracy.

In Nov 2014, Rosendorff emailed Elizabeth Holmes asking her to remove him as Theranos' CLIA lab director. He wrote "I feel really uncomfortable ...I am feeling pressured to vouch for results that I cannot be confident in..."

Holmes replied: How sad and disappointing... Outside the fact you’ve never emailed me any concerns you allude to...you know from every convos we’ve ever had ..how fundamental it is to all of us for you or any other employee never to do anything you're not completely confident in.

Prosecutor points to a Nov 27 2014 text exchange in which Elizabeth Holmes told Balwani they raised $150M from Walmart heiress Alice Walton and "Rupert [Murdoch] over $100M"

Balwani replied "awesome" and "they are not investing in our company they are investing in our destiny."

Before Rosendorff left, he said Balwani emailed him criticizing him. He forwarded the email to Elizabeth Holmes and wrote "I find Sunnys response offensive and disingenuous. He should apologize.” She sent his email to Balwani and said they need to respond and "cut him Monday."

Rosendorff said he didn't make the decision to quit lightly and when he left he refused to shake Balwani's hand.

Prosector shows the jury Elizabeth Holmes' Dec. 26 2014 text message to Balwani writing that "This year is our year. We can never forget this tiger." Balwani replied "We will execute this year," and Holmes responded that "and for our kids never forget who we are."

The feds wrapped direct examination of Rosendorff. We're taking a 30 minute break, and we'll be back w/ his cross examination.

And we're back! Lance Wade is up for Elizabeth Holmes. He starts by handing Adam Rosendorff two large binders and notes that they're filled with Rosendorff's prior statements. Rosendorff seems confused: "Statements of my testimony?" Wade doesn't clarify.

Wade gets Rosendorff to concede that he hasn't met at all with defense counsel, but he's met with federal agents and prosecutors multiple times about this case. (This is a pretty common point that defense teams highlight in criminal trials.)

Wade asks Rosendorff if federal agents went over questions they planned to ask him on the stand during 'prep sessions.' Rosendorff replies that they told him to tell the truth. Wade: Did you discuss that answer? Rosendorff again seems confused.

Wade asks Rosendorff again if prosecutors went over the q's they planned to ask him during trial. He replies "Many of those, yes."

Lance Wade is much, much louder during Rosendorff's examination than he was during Erika Cheung's examination. It sounds like he's annoyed and shouting into the mic.

Lance Wade points to an errata sheet that Rosendorff purportedly signed with corrections of his deposition testimony. Rosendorff replies "an err-at-uh what? I'm not familiar with the legal term." Wade somehow seems more annoyed.

Wade says prosecutors "jumped all around in that binder," "from assay to assay," "one year to the next," "They never walked you through one of the tests from start to finish," and didn't show policy docs, validation reports or CLIA lab director regulations. Rosendorff agrees.

Wade gets Rosendorff to acknowledge that federal CLIA regulations made him legally responsible for all the critical functions of Theranos' clinical lab operations.

Rosendorff wants to clarify that "I endeavored earnestly to fulfill the laboratory director obligations," but he "faced restraints from management." Wade objects and moves to strike. The judge overrules the objection, but notes the attorney can "certainly probe" his response.

Wade: Did you faithfully dispatch your legal obligations as Theranos lab director?
Rosendorff: Yes I did
W: Did you offer lab tests that you knew at the time were inaccurate or unreliable?
R: No whenever they were inaccurate/unreliable I stepped in v aggressively to stop them

Rosendorff concedes that ultimately if Theranos' tests failed it was his responsibility as lab director, and it was his responsibility to enforce the company's quality control policies and proficiency tests.

Rosendorff acknowledges that Elizabeth Holmes dropped out of Stanford as a 19-year-old undergrad and is not qualified to be a lab director.

Rosendorff acknowledges that he had a staff that "under CLIA law" reported to him, but he clarifies that "Sunny Balwani was heavily involved" and gave his subordinates direction daily.

Wade presses Rosendorff on corporate hierarchy and proposes a hypothetical in which Rosendorff keeps rotten food in his office and his subordinates complain to Balwani about him - but the q confuses Rosendorff (and me too tbh) so Wade moves on.

Rosendorff notes that Balwani fired one of his subordinates on his team without consulting him first. Wade asks the judge to strike his answer as nonresponsive, and the judge grants the request.

Wade brings up Rosendorff's 2013 meeting w/ Holmes in which sked he aher to delay the launch. Wade refers to it as the 'drama' of Holmes trembling and her not being her usual self. Rosendorff replies: "No drama. I was just reporting what I observed." (Sounds like a reporter)

Wade is asking Rosendorff about the 2013 Theranos device launch being a "soft launch."

Rosendorff: Can I just ask you--

Wade doesn't let him go on: I'm asking the questions and you're giving the answers.

Wade is focusing on Theranos' Walgreens "soft launch" in late 2013, and various tests that were run on fingersticks. There's an excel spreadsheet pulled up and Wade is walking through the data. Examination is slow, but the point seems to be that the tests had been validated.

Wade gets Rosendorff to concede that Holmes suggested they use venous draws for tests in the 2013 launch after he raised concerns about the accuracy of blood draw with fingersticks, and that was the solution he wanted.

Wade is walking Rosendorff through the master validation assay plans for Theranos devices and the definitions of various terms. This testimony is about as thrilling as watching grass grow.

And we're breaking for 20 minutes. BRB

We're back! Wade says he wants to "back up" and shows Rosendorff his resume that he used to apply to Theranos in 2013.

Wade asks Rosendorff why he applied to Theranos. Rosendorff says he got excided about innovation & Silicon Valley after he read a bio on Steve Jobs, although he can't remember the author. Wade holds up @WalterIsaacson's book and asks if that's the book. He agrees that it is.

Wade asks Rosendorff if he recalls from Isaacson's book Apple's "branding strategies," the importance of marketing and Apple's Big Brother commercial. He says he does remember those details.

Wade asks Rosendorff if he recalls from the book Apple's "intense secrecy" surrounding its technology and that Steve Jobs would review tech in a password protected room. Rosendorff doesn't remember all of those details, but says "that's interesting."

The gov't objects to the line of q, arguing it's not relevant. Wade says "he read the book." The judge replies, "he did read the book," and overrules the objection.

Wade compares Theranos' secrecy to Apple's and notes that Apple is valued at $2 trillion now. Rosendorff acknowledges that he thought a lot of info on Theranos wasn't available publicly when he applied b/c he thought the company must have great tech.

Rosendorff said he watched a talk given by Elizabeth Holmes before he applied at Theranos, but notes "she was a brunette back then." "So was I," the grey-haired Lance Wade replies.

Rosendorff acknowledges that when he was hired at Theranos as its lab director, it had at least one "high-complexity" CLIA certified lab and he was comfortable with most of the lab procedures in place when he "took over" in 2013.

Wade has brought up the Theranos' Laboratory Information System, or LIS, database, which contained millions of data points and patient test results. (reminder - in a pretrial fight, the judge said WilmerHale attys helped lose Theranos' database) law360.com/articles/14099…

Wade asks Rosendorff if he has data from the LIS database. Rosendorff says no. "The LIS was rendered inaccessible," he says, adding. "That happened after I left."

Rosendorff acknowledges that he never had an interaction with Elizabeth Holmes that would lead him to believe she had access to the LIS database. He adds that "I don’t remember what the full capabilities were" of the LIS, but he never had concerns about it.

Rosendorff needs to go to the bathroom, so the judge decided to end trial for the day. The judge excused the jury and asked defense if they plan to raise q's about Rosendorff's post-Theranos employment. Wade says yes, but they'd rather discuss any objections in a side-bar.

Wade says he thinks Rosendorff's cross-examination will likely go "all day" tomorrow, but Rosendorff has a time conflict in the afternoon, so the DOJ may call another witness in the meantime.

With that, trial is breaking for the day. We'll be back here tomorrow morning for more of Rosendorff's cross and a surprise witness in the afternoon!

Evidence presented today to jurors considering criminal fraud charges against Elizabeth Holmes painted a picture of cash pouring into the startup, just as Theranos' lab chief quit over compliance concerns. Here's my (not tweet-sized) recap from today. law360.com/articles/14258…