#ElizabethHolmes trial day 20:
We will get two investors today, if time permits.
First up: Lisa Peterson
And... a new episode of the #dropout: "The Therabros"
open.spotify.com/episode/1kRH1A…
We will get two investors today, if time permits.
First up: Lisa Peterson
And... a new episode of the #dropout: "The Therabros"
open.spotify.com/episode/1kRH1A…
Judge Davila's deputy just brought Prosecutor Jeff Schenk and Defense Attorney Kevin Downey back to his chambers.
The jury filed in around 9:50 a.m.
Lisa Peterson is on the stand. She works for RDV Corporation, the family office for the DeVos family.
Peterson testified RDV made an investment in #Theranos.
#elizabethholmes
Peterson testified RDV made an investment in #Theranos.
#elizabethholmes
Peterson's role is managing a portfolio of private equity investments.
In pretrial discussions, defense attorney lance wade said Peterson did not "play any actual role" in the Devos' family decision to invest in #Theranos
Peterson first heard about Theranos on a plane ride with her boss and the CEO of RDV Corp Jerry Tubergen, who had just met with #ElizabethHolmes and Christian Holmes.
Peterson testified she volunteered to help with a possible investment in #Theranos. It "intrigued" her.
Peterson testified she volunteered to help with a possible investment in #Theranos. It "intrigued" her.
"This morning i had one of the most interesting meetings i can recall," Tubergen wrote to some members of the Devos family and others on their investment comittee in 9/2014.
He attached the fortune mag article.
He attached the fortune mag article.
Peterson and Tubergen had a phone meeting with Holmes on Oct. 3, 2014. Peterson took notes.
In one section she wrote about the risks of a Theranos investment, as described to her by #ElizabethHolmes, she testified.
"now have long term contracts so risk is execution," she wrote.
In one section she wrote about the risks of a Theranos investment, as described to her by #ElizabethHolmes, she testified.
"now have long term contracts so risk is execution," she wrote.
Leach asked if any of the risks she mentioned were about "utility of technology."
"None," Peterson testified.
#elizabethholmes
"None," Peterson testified.
#elizabethholmes
"[Theranos] really wanted to get to know us as much as we wanted to do due diligence on them," Peterson testified.
She said it felt as if Theranos was selecting her/RDV corp as investors. That Theranos was avoiding large firms bc their "time frames were too short."
She said it felt as if Theranos was selecting her/RDV corp as investors. That Theranos was avoiding large firms bc their "time frames were too short."
Leach is now going over a memo Peterson sent to her team which she compiled based off conversations with Holmes and binders that were sent from Theranos.
"holmes believes the companys primary risk is the execution of its business plan rather than tech, validation..." she wrote
"holmes believes the companys primary risk is the execution of its business plan rather than tech, validation..." she wrote
"unlike most labs theranos does not buy analyzer equipment from 3rd party," she also wrote in the memo.
"the results are faster (couple hours) more accurate..." she also wrote in her memo.
Peterson also went to a meeting woth Balwani and Holmes at #Theranos, along with Cheri DeVos, who had her finger pricked.
"to my knowledge she recieved the results," peterson chuckled.
She told leach she never personally saw them.
"to my knowledge she recieved the results," peterson chuckled.
She told leach she never personally saw them.
"Theranos has been comprehensively validated over the course of the last seven years by ten of the fifteen largest pharmaceutical companies, with hundreds of thousands of assays processed.," read one line of the presentation in the RDV Corp. binder, as Leach highlighted.
30 minute break
Leach is taking Peterson through many of the slides in the deck Theranos sent to RDV Corp.
Leached pulled up another document included in the RDV binder.
"Theranos Angiogenesis Study Report"
The Pfizer logo was emblazoned on its upper left corner — just as we saw last Friday w/ Dr. Weber.
"Did you believe this report was prepared by pfizer?" he asked
"Yes."
"Theranos Angiogenesis Study Report"
The Pfizer logo was emblazoned on its upper left corner — just as we saw last Friday w/ Dr. Weber.
"Did you believe this report was prepared by pfizer?" he asked
"Yes."
"Why did you believe that?" Leach asked
"B/c the logo was on it," Peterson replied.
#ElizabethHolmes
"B/c the logo was on it," Peterson replied.
#ElizabethHolmes
Exhibit 2166 :
A document Peterson put together to present to the RDV investment committee
"New Equity Investment --- Closed Oct. 31, 2014," it was headed, in bold.
A document Peterson put together to present to the RDV investment committee
"New Equity Investment --- Closed Oct. 31, 2014," it was headed, in bold.
In the document, Peterson included Theranos' $9 billion valuation
Leach and Peterson are referring to the document as an "RDV Approval Document"
Peterson testified #ElizabethHolmes and Sunny Balwani "never" told her that they were using third party machines for their testing, prior to the RDV investment.
$99,999,984.00
That's the investment RDV made in #Theranos on Oct 31. 2013.
Leach published the wire to the jury.
That's the investment RDV made in #Theranos on Oct 31. 2013.
Leach published the wire to the jury.
"First they think your crazy, and then they fight you, and then all of a sudden you change the world."
We are watching clips from a Mad Money interview w/ #ElizabethHolmes, which followed the WSJ expose.
We are watching clips from a Mad Money interview w/ #ElizabethHolmes, which followed the WSJ expose.
Last week the jury heard #ElizabethHolmes' voice for the first time.
This week they see her in action.
Now the prosecution is moving to a Today Show segment featuring Holmes.
This week they see her in action.
Now the prosecution is moving to a Today Show segment featuring Holmes.
The judge interrupted the Today Show segment, which was playing for all to hear.
"I need to talk to counsel for a moment," he said.
They're going back to Davila's chambers
"I need to talk to counsel for a moment," he said.
They're going back to Davila's chambers
Judge and attorneys are back.
We are going to watch the clip again -- starting at the reporter's intro of Holmes.
today.com/video/theranos…
We are going to watch the clip again -- starting at the reporter's intro of Holmes.
today.com/video/theranos…
Leach ends his direct there. Lance Wade is on for cross.
Wade began with the "Pfizer" report, which he got Peterson to testify she doesn't recall anything about, as she sits her today.
"Do you recall anything except for the logo?" he asked.
A point she referenced in her direct testimony.
"Do you recall anything except for the logo?" he asked.
A point she referenced in her direct testimony.
From 2005 to 2014 how many other direct investments in private companies did you do that were not affiliated with private equity?
none
...this [investment] was somewhat unique?
yes
did you have authority to approve the investment
no
none
...this [investment] was somewhat unique?
yes
did you have authority to approve the investment
no
Wade brought out that RDV COO Robert Schierbeek signed the executed investment document for the investment in #Theranos
He had the "ability to disburse the funds," as Wade put and Peterson agreed.
He had the "ability to disburse the funds," as Wade put and Peterson agreed.
Wade gets Peterson to testify she doesn't know if member's of the DeVos family ever "physically put their eyes" on her memos, shown on direct.
But she did testify that she discussed their substance with them on a plane ride.
But she did testify that she discussed their substance with them on a plane ride.
"You didn't make the investment decision did you?" Wade asked
"I informed the investment committee who made the investment decision," Peterson replied.
"You didnt attend the investment committee meetings?" asked Wade, or know if they read the memos she had written?
"Correct"
"I informed the investment committee who made the investment decision," Peterson replied.
"You didnt attend the investment committee meetings?" asked Wade, or know if they read the memos she had written?
"Correct"
Wade brought up a "unicorn" asked Peterson for her definition. She said something about "high growth."
He asked if she recalled her attorneys told the DOJ and SEC that what drove the #Theranos investment was the company being a unicorn.
objection.
sustained.
He asked if she recalled her attorneys told the DOJ and SEC that what drove the #Theranos investment was the company being a unicorn.
objection.
sustained.
Wade brought up Peterson's notes of the 10/3/2014 call with #ElizabethHolmes which was discussed on direct, and he elicited was only 30 minutes
Then the audio cut off in the overflow room
Then the audio cut off in the overflow room
Wade is back on cross questioning Peterson on the around 30 min call she had with #elizabethholmes.
"Do you recall telling the government the purpose of the call was to get a better sense of her vision?" he asked, and repeated.
She conceded it may have been.
"Do you recall telling the government the purpose of the call was to get a better sense of her vision?" he asked, and repeated.
She conceded it may have been.
Wade showed her statements she made to U.S. attorneys.
"The call was to begin doing diligence," she testified
"The call was to begin doing diligence," she testified
Wade asked if she believed she did appropriate and thorough due diligence in connection with the investment
"I think we did appropriate due diligence for what we were doing, yes," she testified.
#ElizabethHolmes
"I think we did appropriate due diligence for what we were doing, yes," she testified.
#ElizabethHolmes
Wade is grilling Peterson on what she thought testing looked like at Walgreens stores.
She admitted she never went into a Walgreens, b/c she figured it was the same process as when Cheri DeVos visited Theranos and had her finger pricked.
She admitted she never went into a Walgreens, b/c she figured it was the same process as when Cheri DeVos visited Theranos and had her finger pricked.
Peterson proposed to her boss Jerry Tubergen reaching out to her Walgreens contact — the CIO at the time, she testified.
He told her not to, she testified.
He told her not to, she testified.
She cited the "fear of being uninvited to invest" if her company's due diligence went too deep, she testified.
"We went on site for five hours. That was a lot of due diligence," she testified.
"We went on site for five hours. That was a lot of due diligence," she testified.
Wade gets Peterson to admit some of the materials she put in her memo (as shown on direct) were taken directly from the Fortune Mag article.
She told prosecutors this morning her memo was based off a phone call with Holmes and the binders her company was sent.
She told prosecutors this morning her memo was based off a phone call with Holmes and the binders her company was sent.
Wade has one passage from the Fortune article projected next to the memo Peterson wrote.
"Is that just a coincidence or did you lift it from the fortune article?"
"I don't recall."
"Is that just a coincidence or did you lift it from the fortune article?"
"I don't recall."
Peterson's answers are long and she seems flustered, as she defends where she sourced the information written in her memo.
Wade is letting her talk.
Wade is letting her talk.
You asked Mr. Tubergen (CEO) in advance whether there should be any modeling
He said it wasn’t necessary for this
Financial modeling is frequently done in due diligence?
Yes
Mr tobergen told you not to do it?
He told us we were relying on the info we were given
He said it wasn’t necessary for this
Financial modeling is frequently done in due diligence?
Yes
Mr tobergen told you not to do it?
He told us we were relying on the info we were given
Wade elicited that Leach only showed Peterson on direct "2 inches" out of the "foot" of materials sent to RDV in binders.
One of the binders she testified was full of data.
One of the binders she testified was full of data.
Peterson testified she was not aware of anyone else who reviewed the binders.
"This lends credibility to the fact that this works...im not a scientist so I dont know exactly what this is saying," Peterson testified about some IP materials in the binder, as Wade showed.
Wade again elicited that she did not hire an outside expert to review the materials.
Wade again elicited that she did not hire an outside expert to review the materials.
Wade continues to attack Peterson's due diligence.
He brought up the Pfizer / Theranos document.
"I just needed to know that [Pfizer] said it worked," she testified, after not being able to explain some details Wade pointed out in the study.
#ElizabethHolmes
He brought up the Pfizer / Theranos document.
"I just needed to know that [Pfizer] said it worked," she testified, after not being able to explain some details Wade pointed out in the study.
#ElizabethHolmes
"Hadn’t you previously testified you didn't recall the specifics of the meeting?" Wade asked, citing her deposition.
Peterson admitted so.
"So your memory has improved over time?
"I've recollected a lot of things that I read," she replied.
Peterson admitted so.
"So your memory has improved over time?
"I've recollected a lot of things that I read," she replied.
Wade is continuing to impeach Peterson about the meeting at #Theranos
"Do you recall that the meeting focused on high level info?"
"It depends on the definition of high level."
Some laughs in the court room.
"It depends on the definition of high level."
Some laughs in the court room.
Wade says we probably will not conclude this witness today - estimates his cross will last around 30 minutes more.
Peterson was cagey when asked whether or not her team committed $100 million to Theranos while at the meeting.
Wade pulled up an email she sent less than a week later to a colleague.
“Jerry committed on the spot $100m with Doug and Cheri in complete agreement,” she wrote.
Wade pulled up an email she sent less than a week later to a colleague.
“Jerry committed on the spot $100m with Doug and Cheri in complete agreement,” she wrote.
(Doug and Cheri Devos -- and RDV Corp CEO Jerry Tubergen)
Doug DeVos wrote to CEO Jerry Tubergen on Oct. 19, 2014 -- five days after the meeting.
Jerry
Well done! !
Looks like we’re there!
Exciting to be a part of this tremendous effort to change the world for the better!
Jerry
Well done! !
Looks like we’re there!
Exciting to be a part of this tremendous effort to change the world for the better!
"The investment was done before the memo was prepared, correct?" Wade asked.
"We still hadn’t wired the money till after our process was completed," Peterson replied.
"We still hadn’t wired the money till after our process was completed," Peterson replied.
The gov't relied on Peterson's memo on direct to match info #ElizabethHolmes / #Theranos allegedly gave RDV Corp., in connection with the company's investment.
Peterson testified her memo was sent to Tubergen on Oct. 23.
Peterson testified her memo was sent to Tubergen on Oct. 23.
-After your interactions in the meeting with Ms. Holmes, were your next interactions with people in Theranos, interactions with Mr. Balwani?
"Through emails and a convo on the phone, yes"
-Were those the last comms you had in 2014 and 2015
"yes"
"Through emails and a convo on the phone, yes"
-Were those the last comms you had in 2014 and 2015
"yes"
Wade tries to admit an exhibit, prosecution objects.
Judge calls trial for the day.
Judge calls trial for the day.
Attorneys are discussing the exhibit now, from Aug. 2016, which the government objected to as "post investment period"
The defense said the door has been opened after the prosecution played the 2016 Today Show clip.
The defense said the door has been opened after the prosecution played the 2016 Today Show clip.
"I didn't open the door," Wade said, noting he's just "having to deal with it."
"The gov has chosen a post investment interaction to question the witness about," Wade told Davila "They wanted to show it. They wanted to portray my client in a certain light."
"The gov has chosen a post investment interaction to question the witness about," Wade told Davila "They wanted to show it. They wanted to portray my client in a certain light."
Judge offers Wade cautionary advice -- not the first time.
"Let me just be candid…tomorrow she could come in and she could say something like 'I was fooled again.' Are you going to live with that?"
"Theres a risk there."
"Let me just be candid…tomorrow she could come in and she could say something like 'I was fooled again.' Are you going to live with that?"
"Theres a risk there."
"We'll continue our conversation on this tomorrow morning," Davila capped off the discussion.
We'll be back at 8:30 for more.
#ElizabethHolmes #Theranos
We'll be back at 8:30 for more.
#ElizabethHolmes #Theranos
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