Good morning from San Jose! The Giants lost last night to the Dodgers, but the series ain't over yet. In other news, I'm here for day 14 of Elizabeth Holmes' criminal fraud trial. Ex-Walgreens CFO Wade Miquelon will be back on the stand this a.m. Judge Davila is on the bench.
Holmes' counsel wants the court to limit certain testimony by ex-Walgreens exec Nimesh Jhaveri related to certain WSJ articles and Walgreens' decision to close certain stores. Prosecutor Jeff Schenk says they won't go deep into either issue during his direct.
Judge Davila says the juror questioning re unsealing their questionnaires yesterday took multiple hours and they only got through 9 of 15 jurors (which includes 3 alternates). Holmes' atty wants to finish convos w/ the remaining jurors before getting back to witness testimony.
Judge Davila tells Holmes' counsel Kevin Downey: "What you're asking me to do is put this trial on hold resolve that whole motion." (The motion is a request by a media coalition to unseal juror questionnaires even though the judge told jurors they would be confidential.)
Downey says some of the jurors' responses during their questioning yesterday may have "raised issues" regarding Holmes' 5th and 6th Amendment rights to a fair trial, and they should finish w/ the rest of the panel so that they can address any issues before continuing trial.
The judge agrees to wrap up his questioning of the remaining jurors this morning in a sealed session before trial continues. "I hope we can get this done in perhaps an hour," the judge adds. "I think we can and then we can press on. Maybe we’ll go until five." And now we wait...
The woman who showed up during the first days of trial who yelled at jurors about the MeToo Movement has showed up to the overflow court wearing a blue shirt with "Me Too" written on the front.
She said she didn't go to the main courtroom today, because she didn't want to get in trouble with the judge, who warned everybody last time she showed up that people who interfere with jurors or witnesses could face an investigation.
Here's my coverage of that day in court for those who missed it:…
After two hours, the jury is back in the courtroom and Judge Davila is on the bench. He asks if the jury could come into court tomorrow for an extra day of trial this week. He tells the jury to "make inquiries" w/ their employers during the break and let him know.
Former Walgreens CFO Wade Miquelon is back on the stand. Prosecutor Jeffrey Schenk is continuing his direct examination.
Schenk begins by pointing to Theranos' July 2010 master agreement with Walgreens, which Miquelon and Holmes both signed. He says Walgreens had a team working on the agreement and conducting due diligence of Theranos starting in April 2010.
Miquelon says he didn't know that Theranos was using third-party devices to do blood-tests when he signed the agreement in 2010.
Miquelon says he and other Walgreens executives had their blood drawn with Theranos' fingerstick test and the results "went through a physician" for legal reasons before he got them back. He adds that Holmes never told him tests would be drawn venously.
Prosecutor points to a Theranos Jan 2012 presentation with a slide titled “Theranos’ finger-stick based laboratory” that includes the prongs: “No regulatory risk” and "Massive new revenue base."
Another slide shows a three-phase Walgreens Theranos rollout, with the first launch in 2012, the second in 2013 with 1,600 Theranos minilabs in Walgreens stores and the third launch in 2014 with Theranos minilabs in all Walgreens stores.
Miquelon says Walgreens paid Theranos $100 million in an "innovation fee," and gave the company a $45 million convertible note, making it an investor in the startup.
The prosecutor pulls up a document, and Miquelon corrects his testimony -- Walgreens gave Theranos a $40 million convertible not, not $45 million.
In Aug 2013, Miquelon forwarded an email that Holmes sent him saying Theranos needed the $100 million and Walgreens to address multiple issues like training, space and operational infrastructure.
Miquelon forwarded Holmes email Walgreens head of gov't relations Debbie Garza and wrote that "I’m not worried about them or labs… I’m worried about us :(" Miquelon explained that "I think it was a point of frustration" that maybe Walgreens wasn't doing enough to help Theranos.
Prosecutor is reading through a WSJ article on Theranos describing the technology as using "new diagnostic methods to shave time" from the blood-testing process. Sunny Balwani forwarded Miquelon the article.
Miquelon says Balwani told him that Theranos was doing work with the military providing the DOD with tests for Helivac "I believe in Afghanistan," but Balwani claimed he couldn't talk about it b/c of NDA. Miquelon says he was impressed. With that, prosecutors wrapped direct.
Holmes' attorney Kevin Downey is up for the defense. He asks Miquelon how he first heard about Theranos. Miquelon says he first heard about it from Walgreens health innovation head Dr. Jay Rosan.
Miquelon says Rosan said Theranos was a promising company, and Rosan interacted more frequently with Holmes and Balwani than he did. "I never pretended to be a healthcare professional," he says adding that his job is more focused on commercializing products.
Miquelon says Rosen told him Theranos was the "farthest along" in developing the blood-testing technology and he knew that Theranos was in dicussions w/ Safeway, but he didn't know "the extent to it."
We're going to take a 25 min trial break, but the judge tells the jury that he'll likely set more hearings over the next 5 weeks on whether the jury questionnaires can be unsealed and then he'll decide. "Nothing's going to change until I've had all those hearings, he says.
We're back! Holmes' counsel points out that in 2010 Walgreens knew that testing would be offsite in Palo Alto during the first rollout phase and when Miquelon left Walgreens in Aug 2014, the devices were in 40 stores in Calif and Arizona.
Miquelon says Walgreens had meetings "at every level" in considering the Theranos partnership and hired a lab to consider the tech. The lab concluded that out of 150-180 cos in the space, "they thought Theranos was probably farthest ahead," but had concerns about its IT system.
Walgreens hired a team at John Hopkins to vet Theranos' tech in 2010 and Holmes' counsel points to its "key findings" that "the technology is novel and sound. It can accurately run a wide range of routine and special assays" and "No major weaknesses were identified."
Miquelon says Walgreens also hired regulatory counsel to evaluate its deal with Theranos, and it presented complex regulatory issues, b/c "The issue of where is the lab, and I don’t think that had been contemplated before by the regulators."
Holmes' counsel gets Miquelon to acknowledge that he was aware Theranos' Edison devices had multiple generations and he knew the company was working on future models. "Technology is always an evolution," he said.
Holmes' atty points to terms in Theranos' agreement w/ Walgreens that gave both parties the right to end their partnership at any time. Miquelon also agrees Walgreens was doing due diligence throughout the pilot after the deal was signed.
Holmes emailed Miquelon in Aug 2013 a month before Walgreens and Theranos publicly announced their partnership. In the email, Holmes describes a final national rollout strategy "as fast as possible" but says Walgreens has to do a "very significant amount of work" too.
Holmes' counsel pulls up a Jan 2014 email from Walgreen's M&A head Mark Vainisi that says Walgreens would accelerate its payment to Theranos and Theranos would give it "enhanced exclusivity" and parties agree to "work in good faith" to develop the rollout plan.
Holmes atty points to the transcript from a Dec 2013 Walgreens' earnings call in which Miquelon said he thought Theranos had "v meaningful potential" & "we're very very positive on Theranos. It's really one of the disruptive plays..and patient feedback we're getting is v good."
Uh-oh. The judge says we're taking a witness out of order. (!)
The last time a witness was interrupted to call another witness* out of order was Gen. Jim Mattis. Prosecutors tell the judge they don't think it's necessary to take the witness out of order, but they'll check w/ the witness. Trial is taking a 15 minute break.
The jury is back in the courtroom. Judge Davila is on the bench and asks jurors if they can come back tomorrow 9-3. No one objects, so we'll all be back here tmr. Prosecutors say they don't need to take a witness out of order, so Miquelon is back on the stand. (Whatta tease!)
Over objections, Holmes' counsel points to a March 2014 email that Miquelon sent to Walgreens investor Ashish Kohli that says the Theranos “project is going well. When we have a new milestone we will share it."
Holmes' counsel points to an Oct 2015 email that Miquelon sent to Elizabeth Holmes after the WSJ had published articles critical of Theranos. He wrote Holmes
"You are in my thoughts. Hang in there. The haters are everywhere."
Miquelon wrote Holmes another email in Dec 2015 "Elizabeth awesome talking to you today. I will come back to you with more detailed thoughts on how we could do something really game changing as talked." He explains "I very much believed in Elizabeth and what she was up to."
In a March 2016, Miquelon wrote Holmes and others that “I remain confident that the GCC would be a fabulous environment for Theranos from a clinical, capital, structural, and many other perspectives and am excited that you are interested in exploring in greater detail."
In Aug 2016, Miquelon wrote Holmes "Nice job with Dr. Gupta I hope you are well don’t stop working to help the world :) Wade"

She replied "You know how much that means to me. Hope all is wonderful with you."

He says: I def cared about her v much and wanted her to be successful
Defense wrapped cross, prosecutor Jeff Schenk is back up for the gov't. He points out that Johns Hopkins study was done solely for Walgreens and said it "in no way signify an endorsement by Johns Hopkins Medicine to any product or service" and was never given to Theranos.
Prosecutor asks Miquelon if he ever remembers Sunny Balwani correcting Elizabeth Holmes when they met. He says he doesn't recall.
Miquelon's examination wraps with him saying Holmes never told him of the technical issues with the Theranos devices and only about problems with drawing blood from fingers. "I think I wanted to believe that it was true," he says. Defense has no cross.
Prosecutors call NY Federal Reserve Bank deputy chief investigator Robert Amenta to the stand. He's worked there since 1993, he says.
Amenta is giving a run down of how the Federal Reserve Bank tracks interstate wire transfers. (This is pretty technical stuff, but probably needs to come in through this witness for the wire fraud charges.)
The screens in the jury box stopped working so the judge decided to just break for the day. Both sides say they only have ~20 mins w/ Amenta and the next witness is Walgreens exec Nimesh Jhaveri, who prob won't take all day, so there'll be a 3rd witness tmr. Ciao ✌️
Today's long day of testimony in Elizabeth Holmes' criminal trial unveiled emails b/w former Walgreens CFO Wade Miquelon and Holmes, in which he tried to comfort Holmes as Theranos faced public scrutiny. "Haters are everywhere," he wrote.…

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More from @doratki

14 Oct
Today will be hella busy as in Elizabeth Holmes' criminal fraud trial. In addition to a full day of witness testimony, Magistrate Judge Nathanael Cousins will be holding hearings on separate motions by @JohnCarreyrou & @rparloff at 1:30 so I'll have a foot in 2 courts. Party on. Image
I'm back in San Jose a few mins late (thnx Amtrak). Judge Ed Davila is on the bench and he's discussing potentially breaking trial for the hearing before Judge Cousins. The attorneys say it's not necessary b/c some attys can leave and argue the motions while trial continues.
The parties turned to arguing over Holmes' request to limit certain testimony from the third witness called today, ex-Theranos lab director Sunil Dhawan, and a letter w/ certain CMS findings on Theranos. Prosecutors say it's relevant and fair game.
Read 74 tweets
12 Oct
I'm back in San Jose for day 13 of Elizabeth Holmes' criminal fraud trial. Ex-Safeway CEO Steve Burd is expected to get back on the stand for some more q's on direct before cross. Judge Davila is on the bench.
Judge Davila says he wants trial to go until 3 p.m. today, 4 p.m. tomorrow and 1 p.m. Friday. The parties expect Burd's examination to wrap this afternoon, so it sounds like there'll be another witness this p.m.
Judge Davila says he wants to question jurors about publicly filing their questionnaires in response to a media coalition's request. Defense counsel wants to be present for the questioning, but prosecutors say the defense has no constitutional right to be present for the q's.
Read 63 tweets
6 Oct
I'm back in court for day 6 and hopefully the final day of ex-Theranos lab director Adam Rosendorff's examination. Judge Ed Davila is on the bench. Former Safeway CEO Steven A. Burd will testify after Rosendorff.
Holmes' counsel Kevin Downey wants Judge Davila to prohibit Burd from testifying that Safeway spent "hundreds of millions of dollars" renovating its stores for Theranos blood tests. Downey says renovations don't legally constitute property or an investment.
Prosecutor Robert Leach says Burd should be able to testify that Safeway spent $300 million "building out" its stores for Theranos testing devices, b/c it's directly relevant to the materiality of Holmes' representations to Safeway.
Read 67 tweets
6 Oct
Fyi - yesterday, Judge Davila kicked @JohnCarreyrou's fight over trial access to Magistrate Judge Nathanael Cousins. As a magistrate, Judge Cousins presides over too many evidentiary and pretrial disputes to count, but he is very good at what he does.
Many moons ago, Judge Cousins presided over fights in this putative shareholder class action against Theranos.…
In that case, Judge Cousins refused to certify a group of indirect investors alleging securities fraud claims against Theranos, Holmes and Balwani, finding that weaknesses in the proposed class make individual actions preferable. The case later settled.…
Read 4 tweets
5 Oct
Hello! I'm in San Jose for day 11 of US v Elizabeth Holmes and day 4 of ex-Theranos lab director Adam Rosendorff's cross-examination. Judge Davila is on the bench, and Holmes' counsel Lance Wade is asking the judge to let him probe Rosendorff on his post-Theranos work.
Wade says Rosendorff is incompetent and was fired from one post-Theranos lab director job after 50k quality control tests failed. Another employer, uBiome was investigated for fraud, he says. Wade: "If he’s incompetent and didn’t do his job that’s exculpatory of Ms. Holmes."
Wade also argues that Rosendorff also lied on his resume and faces career pressure to go along with the government to avoid prosecution in other cases. Judge Davila notes that "this sounds like character evidence."
Read 59 tweets
1 Oct
Happy Friday from San Jose! I'm waiting for day 10 of Holmes' trial to start. No crowds today, but there's a new filing by @JohnCarreyrou who's gotten himself an atty. He's a possible witness and wants the judge to assure him he won't be barred from watching/covering the trial.
Judge Davila is on the bench, jurors are in their seats and ex-Theranos lab director Adam Rosendorff is back on the stand for the third (and hopefully last) day of his cross-examination.
Holmes' counsel Lance Wade begins by picking apart Rosendorff's testimony that Holmes and other execs rejected his request that Theranos use an alternative assessment procedure - or AAP - in its proficiency testing.
Read 31 tweets

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