Thread by @doratki

Good morning from San Jose! It's week 7-ish of Elizabeth Holmes' criminal fraud trial and Judge Ed Davila is on the bench. The parties are arguing over letting the jury see Holmes' Today Show and Mad Money clips. Sounds like investor Lisa Peterson will be testifying today.

Prosecutors say the interview clips are relevant b/c they show Holmes' state of mind. Defense counsel wants to play the entire interview segments instead of just clips for "completeness" and fairness.

Holmes' counsel Lance Wade also notes that witness Lisa Peterson was a wealth manager at RDV Corp for the DeVos family and she didn't decide their investments, four members of the family decided them. But prosecutors disagree.

Wade says the DeVos family chose to invest in Theranos in Silicon Valley and a memo memorializing the investment that Lisa Peterson signed for RDV Corp happened months after the investment.

The judge won't limit Peterson's testimony, but he allows Wade to have a standing objection to Peterson's testimony on the DeVos family's Theranos investment.

Judge Davila says he received an email from a juror complaining about the noise from keyboard typing. The judge again says he'll bring in a Marshall to kick out folks who don't use silent keyboards. He adds that if they continue to complain, he'll ban keyboards from the courtroom

The jury is in the courtroom, but Judge Davila is not on the bench. It's been 30 minutes. Unclear what the hold up is.

Judge Davila is on the bench. He says he wants trial to go until 4 p.m. today and he wants to add Mondays in Nov. A juror says it's getting "very tough" for him to manage his workload with added trial days. The judge says maybe they'll drop some days.

The judge reminds everyone they need to use silent keyboards or else he'll make everyone w/ computers go to the overflow room. "I hate to send all of you down there," he says. (Lol sounds like he's sending students to detention. It's r not so bad here. The seats are cushioned!)

Prosecutors call to the stand RVD Corp private equity group manager Lisa Peterson, who helps manage the DeVos family's estate. She's worked at RVD for 16 years.

Peterson says she first heard about Theranos on a plane ride back from Chicago after RVD Corp CEO Jerry Tubergen met Elizabeth Holmes and her bro Christian.

She says she volunteered to work w/ Tubergen "to prepare everything that would go to the investment committee," which is made up of DeVos family members.

Prosecutor points to a Sept 2014 email that Jerry Tubergen sent to DeVos family members stating "This morning I had one of the most interesting meetings I can recall with the woman profiled in the Fortune Mag." He attached a copy of the Elizabeth Holmes cover story to the email.

Peterson says she reviewed two Theranos binders, a cover letter and spoke to Elizabeth Holmes with Tubergen on the phone Oct 3, 2014. Peterson's notes from the call says "Walgreens (market 11m tests/month)" and "boots in Europe."

Peterson's notes from the meeting says Theranos' risks are that the company has "long-term contracts, so risk is execution." Prosecutor points out that tech issues were apparently not mentioned as a risk.

Peterson says she thought Holmes was "hand-picking" investors and "it was very much characterized" that she was inviting the DeVos family to participate in the opportunity to invest.

The presentation Peterson gave to the DeVos family said "Theranos requires only a pin-prick and a drop of blood to perform hundreds of tests," and the primary risk is the "execution of its business plan, rather technology, validation and customer acceptance."

Peterson's presentation also says Theranos' devices can be used in military evac helicopters, which she says Holmes told her. She then met with the DeVos family, Holmes and Sunny Balwani during a 5-hr meeting in which Holmes showed them a demo and Cheri DeVos had her blood tested

Prosecutor walked through a Theranos presentation that RVD Corp received, which made multiple claims about Theranos' ability to do a variety of tests and that "Theranos provides the highest level of oversight." Trial is taking a 30 min break. BRB

The jury's back! Lisa Peterson is on the stand and prosecutor Robert Leach is continuing Peterson's direct exam. He's going through the Theranos PowerPoint and walking through the company's various statements, like it can process "any sample type" that a central lab processes.

Prosecutor points out that at the end of the PowerPoint, Theranos cited multiple news articles about the company that ran in various outlets, including BBC World News, Fortune, Forbes, USA Today, Fox biz and
The Arizona Republic.

Peterson says Theranos sent her its "angiogenesis" study with Pfizer's name and logo. She says she thought Pfizer produced the report and concluded that Theranos' analyzers were accurate.

Peterson said she received Theranos' financial projections, which showed lab services to go from $42M in Dec 2014 to $470M a year later. The doc also says Theranos' pharma co revs by end of 2014 would be $40M and hospital rev $47M, but "TBD" for the DOD.

Theranos' financial projections indiciated that its total revenue would be $140M for 2014, and total revenue expected a year later was $990M, which she thought was "impressive."

The Oct 2014 document also projected Theranos' net income would grow from $3 million at the end of 2014 to $230 million in 2015. (During trial openings, prosecutors said Theranos only made $150,000 in revs in 2014.)

Prosecutor points out that the DeVos family invested roughly $100 million into Theranos. He's now playing clips from Holmes' @jimcramer Mad Money interview in Oct 2015 that occurred after the WSJ articles cast doubt on Theranos' tech.

Prosecutor also is now showing the jury a clip from Holmes' Today Show interview in April 2016. today.com/video/theranos…

The judge interrupted the clip and told counsel he wants to talk to them in chambers. (My guess is he may be concerned that the intro to the Today Show clip is prejudicial.) We're taking a short break.

And we're back. Prosecutors are playing the clip starting from the top.

Peterson said after the news reports, she and ex-Cravath partner and investor Dan Mosley met with Holmes and other Theranos employees and she says they "very much downplayed what had been happening in the press." The gov't wrapped direct. Lance Wade is up for Holmes on cross.

Wade begins asking Lisa Peterson what she recalls of the Theranos angiogenesis study w/ the Pfizer logo. She says she doesn't recall the blood test, where the study was done or what kind of study it was. But she says the "take away" was that she thought Pfizer validated the test.

Wade presses Peterson on the DeVos family patriarchal structure, and the various generations and how the DeVos family members rotate in RDV Corp's investment committee.

Wade points out that Dan Mosley was a partner at @Cravath, which he notes is "one of the most highly reputable law firms in the world." But she won't concede the point.

Peterson: I don’t know

Wade: It is a highly reputable law firm.

Peterson: I don’t know.

Peterson acknowledges that she wasn't briefed by RVD Corp CEO Jerry Tubergen about his various Theranos related discussions with Dan Mosley and she wasn't privy to all of their communications.

Peterson acknowledges that she doesn't know if DeVos' family members read the Theranos memo she prepared, but she says she discussed it with them on a plane. Holmes' counsel asks if she took notes during their discussion. She says no.

Holmes' counsel points to a Theranos analysis that ex-Cravath attorney Dan Mosley sent to Henry Kissenger in Sept 2014. Peterson acknowledges that she doesn't know if Mosley sent the analysis to her boss, Jeff Tubergen, around the same time.

Peterson admits that 2 years later when they were trying to figure out Mosley's role in the investments, she communicated w/ her boss about the analysis through her Gmail instead of work email. "Frankly we didn’t want to get in trouble."

Atty: You hid the doc?

"Somewhat, yes."

Wade gets Peterson to acknowledge that she didn’t attend the DeVos fam investment committee meeting, and she doesn't know if the committee read her Theranos memo. But she says she prepared the memo before they decided to invest in Theranos. "We'll get to that," Wade says.

Trial is taking an afternoon break. We'll be back in 30-ish.

We're back! Wade asks Peterson if she did an "exhausted due diligence in the investment." Peterson said they did all the diligence that they would do at the time. He asks what she means. She says she think the DeVos fam investment firm did "appropriate" due diligence of Theranos.

Holmes' counsel Lance Wade asks Peterson if she read Theranos' press release announcing the Walgreens deal in Sept 2013, which mentions Theranos uses "traditional methods" of blood draw as well as fingerstick, in her due diligence. She says she never read the press release.

Petereson says she didn't read Theranos' website, which Holmes counsel says mentioned the venous draws. Peterson seems annoyed. She repeatedly says they relied on what they were told and "we went on site for five hours" and "that was a lot of due diligence."

Peterson acknowledges that the DeVos family investment firm never hired regulatory experts, counsel, or medical experts in the due diligence process, b/c "we didn't think we needed it." She keeps interrupting Holmes attorney Lance Wade's questions and talking over him.

Lance Wade asks Peterson if details in her Theranos memo to the DeVos family investment committee came from a Fortune Magazine article. She says she doesn't remember, but she admits she might have taken some info from the Fortune Mag. "Much of it was in [Theranos'] binder."

Wade is picking apart Peterson's Theranos memo and asking her where she got the information in it. She keeps saying she got the info "off the internet" w/o more details (which doesn't inspire much confidence tbh).

Peterson concedes that it's common in due diligence to review IP portfolios and a company's contracts w/ its partners, but she says she and the DeVos family didn't do that.

Peterson repeatedly has said during cross that the meeting in Palo Alto was apart of Theranos' due diligence, but Wade impeaches her w/ her prior deposition when she said she didn't consider the Palo Alto trip due diligence.

With some of the testimony today, it's kind of surprising that Peterson manages wealth as her job. At one point she didn't seem to know what a unicorn is. Overheard in the courtroom: “I wouldn’t let this woman run a car wash for me.”

Holmes' counsel points to an Oct 2014 email that Peterson wrote stating her boss Jerry "committed on the spot $100M with Doug and Cheri in complete agreement." (This is to counter her testimony on direct that the DeVos firm doubled their investment to $100M after due diligence.)

On the stand, Peterson explains "It’s my characterization of what I saw," but she notes that there are still processes that had to occur before the DeVos family invested money into Theranos.

Holmes' counsel: "The investment decision was made before the memo was even prepared, correct?"

Peterson: "Yes, it looks that way," but she adds, "It still has to go to the investment committee" and they still didn't wire the money until the docs were signed.

An issue came up with an exhibit, so the parties are breaking for the day to discuss it outside the presence of the jury. Trial will resume tomorrow with Lisa Peterson on the stand for some more cross. ✌️

The DeVos family, whose multibillion-dollar fortune came from the beauty marketing co Amway, decided to give Theranos $100M "on the spot," according to testimony today. M/w, defense counsel raised q's about their due diligence. Here's my daily recap! law360.com/articles/14346…