Thread by @MilesGCohen

#ElizabethHolmes trial day 23:

Dr. Henry Kissinger's longtime lawyer Dan Mosley, who personally invested $6 million in Theranos after the former Secretary of State asked him to vet the company, is back on the stand Wednesday morning where he will likely complete his testimony.

In pretrial arguments, Judge Edward J. Davila said he will "very well likely" grant the defense's motion to exclude testimony from patient "B.B." who received purportedly inaccurate results from an assay not included in the government's indictment or bill of particulars.

"It sounds like the government was confused as to its assays," Defense attorney Katie Trefz told the court.

“This is the U.S. government, this is a criminal case, they should be held to a higher standard.”

Defense attorney Lance Wade is back for cross examination. He picks up where he left off: running through the white-shoe lawyer's clients.

Among them the Walmart Waltons.

Wade also brings up Mosley's contact with the Stavros Niarchos Foundation, the Cox family, and the Oppenheimer family, who the witness recalled invested $20 million in #Theranos.

The defense's demonstrative:

Theranos Investor (Mosley Relationship)

Walton Family (Attorney)
Devos Family (Attorney)
Cox Family (Attorney)
Andreas Dracopoulos (Attorney)
Henry Kissinger (Attorney, Trustee)
Oppenheimer (Friend of Dr. K)
John Elkann (Friend of Dr. K)

In the right hand column their investments in #Theranos:

Investment

$150 million
$100 million
$100 million
$25 million
$3 million
$20 million
$5 million

Wade showed an August 2014 email chain between Holmes and Mosley, where Holmes sent Mosley a CDA (like an NDA he testified.)

“I fully understand the importance of the CDA,” he wrote back, referring to it as a "reasonable" document.

“I thoroughly enjoyed reading the materials and can't tell you how appreciative and thankful I am for the opportunity to become one of your shareholders," Mosley wrote to Holmes on Sept. 2, 2014.

That same day, Mosley sent an outline of his thoughts on Theranos to Kissinger.

We are looking at it.

The document was never sent to #ElizabethHolmes, Wade elicited.

Wade again hits the topic of NDA's — an area the government has highlighted throughout the trial.

“Elizabeth is quite understandably very careful about obtaining non-disclosure agreements before providing any in-depth info about theranos," Mosley wrote to Kissinger on 9/2/2014

Wade is going through the slide deck Mosley was given by Theranos.

"From this page, page 2 - page 204 there is very detailed data that is provided w/ respect to Theranos assays," Wade said.

"You're not an expert on lab testing."

"I most certainly am not," Mosley replied.

"Routine Test Validations Demonstrate High Correlation Coefficient Across Clinical Range” read one slide.

“There is substantial data and other info attesting to the quality performance and reliability of the #Theranos tech," Mosley wrote in his outline, as Wade showed.

"National retail footprint and health plan partnerships throughout the US for an unprecedented infrastructure which exceeds that of any commercial lab in today's market," read another slide.

"You knew at the time they didn’t yet have that national footprint"

"I understood that"

"But you understood the goal was to have a national deployment [in] Walgreens," Wade continued.

Mosley agreed.

Wade also got the witness to testify he came to know Theranos devices were not kept inside of Walgreens stores before he invested.

Wade addressed the Pfizer report (the one w/ the logo) — that Mosley testified on direct he believed Pfizer drafted.

"You never sought any clarification on who drafted the report from theranos?"

"I did not."

Wade pulled up the Theranos/Walgreens press release from Sept. 2013 announcing their partnership.

"The samples are either taken from a tiny finger stick or a micro-sample taken from traditional methods," Wade highlights from the release.

He hones in on "micro-sample"

"Do you understand this as a venous method?"

"I cant say that I focused on those words and reached any particular confusion."

An attempt at an explanation for Theranos' high % of venous tests conducted at WAG, as highlighted earlier in trial

“The partnership with Walgreens is brilliant,” Mosley wrote in his outline as Wade highlighted.

"To go from 30 stores to a 1000 stores is a pretty big deal," Wade said.

"It was a big undertaking, yes," Mosley replied.

Wade and Mosley have a collegial rapport.

Notably different vibe than from some of the other crosses — former Lab Director Adam Rosendorff and DeVos Family Wealth Manager Lisa Peterson for example.

Wade pulled up the "Projected Statement of Income" #Theranos sent Mosley along with other materials, that the gov admitted on direct.

It shows an estimate of $42 million of revenue based off "lab services from US Retail Pharmacies" in 2014 alone, among others.

"Do you recall you posed some questions to Mr. Balwani about the 2015 projections?" Wade asked.

In the spreadsheet there is a "Proforma: Statement of Cash Flow"

-Services NBL by Walgreens "-------"

-Services NBL by Safeway "------"

Wade notes there is nothing there — no numbers

Wade's line on investment risks:

-You knew this was a young company
(I did)
-You knew it had a young CEO
(Yes, I did)
-You knew #Theranos itself did not have a lot of retail experience
(I did)
-As a result...you could lose all of your money
(It was certainly possible...)

“It certainly involved risk,” Mosley conceded of his investment in Theranos

We went over one risk Mosley noted in his outline to Kissinger re an "unusual provision," as described by Mosley, providing power for #ElizabethHolmes to buy back shares.

Wade got the witness to admit his concern was brought up and addressed by the company.

We're breaking

Back from break, and attorneys once again discussed patient "B.B.'s" potential testimony.

Bostic proposed deferring B.B.'s testimony until the end of their case, as a remedy for the lack of notice to the defense.

"We're searching for a practical decision here," Bostic said.

Unless that's six months down the line, Trefz quipped, there is still an issue.

Really though. We have no idea how long the government's case will last.

Andddd the witness has returned to the stand.

"My understanding I believe at all times was that FDA approval wasn’t needed," Mosley testified.

He cited a number of convos he had with #ElizabethHolmes

“We intend to get FDA approval b/c that is the gold standard," Mosley understood from Holmes.

Wade is questioning Mosley about a 2014 BDT conference, which Mosley and Holmes spoke at, and the Walton's (his clients) and the DeVos's (his clients) attended.

"Is that sort of a Woodstock for private family offices?" he asked

"I wouldn’t describe it that way," Mosley replied

Judge does not see the relevance, and will not allow the "entirety" of a related document into evidence.

The way Mosley would describe it — as he testified:

"There were some sessions in the theater, some sessions in the breakout rooms. Some dinners. It's a combination of different activities."

Wade got part of the document published to the jury. It appeared to be the BDT program which included a description of the panel Holmes was on.

She is listed under the sections “Game Changers” and “Disrupting Industries and Launching Businesses”

On 9/17/2014 Mosley sent the Fortune front page profile on Holmes to Jerry Tubergen (CEO RDV - the DeVos wealth management company)

Wade introduced this email during Lisa Peterson’s testimony.


Wade has the article published to the jurors screens.

Wade zeroed in on a passage of the @FortuneMagazine article that described Holmes as a 19-year-old and a teenager.

"Do you see that?" Wade asked.

Mosley testified it was a "very compelling story"

One of the Grafs:

"In the fall of 2003, Elizabeth Holmes, a 19-year-old sophomore at Stanford, plopped herself down in the office of her chemical engineering professor, Channing Robertson, and said, “Let’s start a company.”

Another:

"Holmes had then just spent the summer working in a lab at the Genome Institute in Singapore, a post she had been able to fill thanks to having learned Mandarin in her spare hours as a Houston teenager."

Is it fair to say this was an impactful article when you read it?

absolutely...

Another sentence highlighted:

“It’s real data,” [David Helfet, the chief of orthopedic trauma at the Hospital for Special Surgery in Manhattan] says. “It’s not their interpretation.”

"Was that impactful?" Wade asked

"It's an important statement," the witness replied.

Wade read this passage from the article slowly:

“She looks like 19,” says board member Henry Kissinger, 91.

Asked to assess her as a leader–because he’s seen a few–he responds, “I can’t compare her to anyone else because I haven’t seen anyone with her special attributes.

continued:

"She has iron will, strong determination. But nothing dramatic. There is no performance associated with her. I have seen no sign that financial gain is of any interest to her. She’s like a monk. She isn’t flashy."

"I suspect they had already read the article,"Mosley testified of Greg Penner and Rob Walton, when asked if he personally sent it to them.

"I suspect they were very impressed, as was I"

Wade has a demonstrative up depicting the timeline between July 2014 and December 2014

The calendar months are next to each other as such:

July 2014 August 2014 September 2014

October 2014 November 2014 December 2014

Wade circled certain dates.

July 21 - (Mosley first contact with Holmes?)
Sept 2 - the day Mosley wrote his outline for Kissinger
Sept 15-17 - meetings with his seven-figure clients
Oct 31 - Mosley's first investment

On Sept. 18, 2014 Mosley wrote Holmes.

As Wade highlighted —  a day or two after the BDT conference and the meetings with his clients.

“I wanted you to know that I have sent the blank [CDA] to both the Cox family group and to Jerry Tubergen from the DeVos family,” Mosley wrote

At this point, Mosley testified, the meetings with Holmes and his clients (including the DeVos family) "were just intros."

"I am happy that each of the potential investors from the Walton, Cox, DeVos, and Niarchos families are proceeding well as I would expect," Mosley wrote Holmes on Oct. 6, 2014.

Holmes responds:

"We had a good call with Jerry and a woman on his team [presumably Lisa Peterson who just testified] on Friday of last week in anticipation of our meeting."

Wade is going through VOLUMINOUS correspondence between Mosley and #ElizabethHolmes, which show him updating the CEO on his coordination of meetings with his clients / prospective investors

“I got a great report from Jerry Tubergen after your meeting, which obviously went very well,” Mosley wrote to Holmes on 10/15/2014, a day after Tubergen and the DeVos family visited Theranos.

We're taking a break. Judge is visibly frustrated at the length of Wade's cross.

It's the defense attorney's "hope" the witness will finish today.

Mosley is back on the stand.

Wade admitted a Nov. 19, 2014 email from Mosley to Holmes which referenced Hank Slack — a representative of the Oppenheimer family

"In addition, I think I previously mentioned that Hank was at the BDT conference and heard you speak there," he wrote

Mosley said the Oppenheimer's were never clients of his.

In the defense's demonstrative shown earlier the family was referred to as "Friends of Dr. Kissinger"

Wade brought up the stock buyback issue, which Mosley wrote about in his outline to Kissinger, and testified was eventually resolved with a letter effectively ensuring Holmes couldn't buy back his and his clients shares for a lower price than they paid

"I am more than okay w/o it and hope Elizabeth does not think it necessary. If I did not have deep trust and faith in Elizabeth I would not be involved with Theranos and recommending an investment by clients," Mosley wrote to Chris Boies re the letter on Oct. 30, 2014.

More on due diligence

"Do you recall in your due diligence whether you looked at the [Theranos] website?" Wade asked.

"I cant imagine that I didn't look at the website," Mosley responded.

Wade showed what appeared to be screen grabs from Theranos website (conditionally admitted) and highlighted the sentence:

“Instead of a big, intimidating needle, our certified phlebotomists can use a tiny finger stick or a micro-sample from a venous draw."

I didn't hear him specify a date on the screen grabs.

Wade asked if during the Aug - Oct period when Mosley was considering an investment in Theranos, he came to know this info

"I dont believe I knew this at the time," the witness testified.

Attorneys are back in Davila's chambers disputing the admissibility of a few documents.

Other than those — wade is done with his cross examination, he told the court.

Redirect will follow.

Nineteen minutes to get it all accomplished.

Davila sustained the objections as to the documents.

Wade has more questions.

He asked about a few other intros Mosley made presumably to investors, and called it quits.

Prosecutor Jeff Schenk is on for redirect. He has "just a couple of questions."

Schenk is asking Mosley to distinguish whether his understandings about Theranos testing accuracy, "healthy" relationship with Walgreens, etc were a "vision" or a "current capability."

To all, the latter.

That's it for Mosley.