Thread by @doratki

Good morning from San Jose! It's day 31 in Elizabeth Holmes' criminal fraud trial. Judge Ed Davila is on the bench. He says we'll be going until 1 p.m. with Holmes' counsel continuing the cross examination of investor Alan Eisenman.

The parties are arguing over whether the defense can ask Eisenman about a 20-year-old fine that the witness was hit with related to securities trading. The judge agrees w/ the gov't that the fine shouldn't be mentioned to the jury.

The jury is in the courtroom and Theranos investor Alan Eisenman is back on the stand. Holmes' counsel Kevin Downey is up to continue Eisenman's cross-exam. He pulls up Eisenman's May 2010 email with Holmes.

Downey says before his May 2010 email, Holmes told him the co was entering deals w/ retailers. Downey asks if she mentioned an equity offering. Eisenman says no but Holmes "was talking about an IPO year after year after year.. She was hinting there was an IPO around the corner."

Eisenman acknowledges that he hadn't reviewed any Theranos contract w/ retailers that included restrictions, and he admits cos making equity offerings may have to limit what info they share w/ investors, but he says repeatedly that he didn't know Theranos was making an offering.

In July 2010, Holmes wrote Eisenman: "Alan, your continued daily calls and emails after we’ve already told you multiple times that we do not have additional information we can disclose beyond what we’ve already shared with David are upsetting to us.."

Holmes' counsel asks Eisenman if he understood Holmes was frustrated b/c he kept asking for insider info she already said she couldn't share with him.

Eisenman: No, I thought she was hiding information that should be disclosed to an investor.

In Sept 2010, Eisenman emailed Holmes asking her why Larry Ellison was removed as a board member from Theranos' website. Holmes replied to him "per our call there is no new info to be shared with our investor base."

In Feb 2011, Eisenman asked for a quarterly update. Sunny Balwani replied that Theranos didn't give quarterly updates. Eisenman wrote back "I understand you don’t have an obligation to update use but I would appreciate" another call. Balwani replied there's no new info.

In 2012, Eisenman emailed Theranos chairman Don Lucas asking for more info on the co. Lucas' assistant replied saying Don didn't have any additional info for him, but they recommended he continue following the co in news articles.

In 2012, Eisenman wrote Holmes that "It has been over 2 years since you have communicated w/ investors." Holmes replied, “No Alan, it has been about that long sing you decided to start harassing our chairman..."

Holmes' email went on.. "despite the fact we communicated multiples times that if you did so, we would no longer respond to your requests to talk with you in light of all our past interactions." On the stand, Eisenman says Holmes' email is a "total mischaracterization."

Holmes' counsel points out that Alan Eisenman's father-in-law is an "extremely wealthy" Tennessean Joe Gordon who is an active political contributor. Eisenman acknowledges Gordon is philanthropic, but refuses to comment on his political contributions.

Holmes' counsel points out that Alan Eisenman emailed Repub. Sen. William Frist, who was a Theranos director, asking for info, and mentioned his father-in-law, Joe Gordon, but he wrote in his email that he didn't want Gordon, who was also an investor, to know he was reaching out.

Holmes' counsel notes that last week prosecutors told Eisenman that they couldn't communicate with him about his testimony during the trial break, but Eisenman emailed an agent 15 hours later about his testimony.

Eisenman's email asked prosecutors for their take on how he did on the stand. The gov't agent called him and told him "Do not communicate with the government. She said 'do not call us. Do not text us and do not email us.'" Eisenman agrees she said he couldn't talk to gov't.

Holmes' counsel asks after their call, "how long did it take for you to reach out to the government?" He won't answer the q directly and says his next email "had nothing to do with the case." But defense notes that prosecutors called him and told him not to email or call the DOJ.

Holmes' counsel points out that prosecutors told Eisenman "Do not communicate with us again." "That was the third time the gov't told you do not communicate." He replies "I’m a smart guy this had nothing to do the case." Holmes counsel notes the prosecutors thought it did.

Eisenman keeps interrupting Kevin Downey. For probably the 6th or 7th time since Eisenman took the stand last week, Judge Ed Davila has interrupted Eisenman and asked him to listen to the attorney's q and answer it directly.

Eisenman says his relationship with Balwani was "very hostile for a number of years" and Balwani had "responded fictitiously" to him, "so his credibility was low." "For the most part he either ignored or intimated me," Eisenman says.

In Jan 2015, Balwani wrote Eisenman "You continue to bombard us w/ emails and phone calls even though just 12 short months ago I spoke with you in detail that you will not get any updates, that you shouldn’t invest.." Eisenman says before 2015, Balwani was "most encouraging."

Trial is taking a 30 min break and the jury and Eisenman left the courtroom. The parties are discussing Eisenman's personal notes, which the defense subpoenaed for "counsel to review." Eisenman didn't want to hand them over.

We're back! After reviewing Eisenman's handwritten notes, Holmes' counsel Kevin Wade tells the judge that it looks like Eisenman added details to his notes, b/c some notes are written in a different color pen. He has "concerns about the integrity" of the notes, he says.

Kevin Downey* (not Wade) wants to question Eisenman about his notes. Judge Davila says it sounds like Eisenman's examination won't be done today in light of defense's request. (The judge seems mildly irked.) He calls in the jury.

Eisenman is back on the stand. Downey points to a Dec 2013 email Balwani wrote in response to Eisenman's request for info on future offering rounds and valuations. Balwani wrote he can't answer the q's "and speculate on what those valuations may be. Those may or may not happen."

In 2010, Holmes wrote Eisenman "as you know" Theranos is an early stage startup that "comes with immense risk" and “this may not change in years to come." Eisenman replies "this is a total contradiction" to everything he was told and goes on, but the judge strikes the answer.

The judge asks Eisenman if he heard the attorney's question, but Eisenman interrupts the judge "I did hear it, but it’s misleading." The judge tells him "that's not how this works" and tells him he needs to wait for him to finish his q and then give a thoughtful response.

Downey points out that Eisenman initially bought 400k Theranos shares in 2006 for $2.82 per share, and in Dec 2013, Theranos was selling shares for $75, so his investment had increased by more than 2,000% and he chose to buy more.

Downey points to Eisenman's 2013 contract that says the Theranos is "highly speculative". Eisenman says repeatedly that "I would agree it’s boilerplate" and "everybody signs it," but he had no choice to sign it and "this contradicts everything I understood at this point of time."

Elizabeth Holmes' attorney: "The company didn’t put a gun to your head and make you invest, did they?"

Alan Eisenman: "Excuse me? I don’t understand the question."

Eisenman eventually concedes that he thinks the speculative provision in his Theranos investment contract was meaningless. Holmes' attorney moves on pointing out that in 2010, Holmes told Eisenman he could liquidate his $1M investment w/ a 500% profit, but he didn't take it.

Eisenman said he considered the offer, but "they just mentioned it and dropped the ball” when he asked for more info. He adds that if you sell stock you want to be informed, and "no one has ever treated me this way."

Holmes' counsel points out that Broadmark investment co later offered to buy out his Theranos shares that he had bought for $1 million for $30-$35 million. Eisenman said he didn't follow up, bc he didn't know if the offer was legitimate.

Holmes' counsel notes that in Aug 2015, Theranos offered to buy back Eisenman's shares for $15 per share, but he responded that the shares were probably worth "well in excess" of the $15 offered. "We had no financial information to make a rational decision," Eisenman explains.

Eisenman then went to a market maker, SharesPost, in Sept 2015 and tried to see how much his shares would go for in a secondary market. They told him the shares were going for $14.75 per share, and Holmes' counsel points out he could've gotten $20-$25M on his $1M investment.

Holmes' counsel pulls up a Dec 2018 email Eisenman wrote an FBI agent. He said "You know that I am a faithful part of your team, and will do all that I can to help your case.” The atty asks if the statement is accurate. Eisenman won't answer directly and says it's "subjective."

Holmes' attorney Kevin Downey wraps cross asking Eisenman if he's ever asked the DOJ to investigate other companies he's lost money in. Prosecutors objected, and Eisenman states loudly, “I have no bias in this case." (Got a laugh from folks watching in the overflow courtroom.)

On redirect, Eisenman says he wasn't trying to get a competitive advantage over other investors by asking Theranos q's. He says he had seen a "barrage" of news that Theranos tech worked and thought it did in 2013 when he invested more into the co.

Redirect wraps with a prosecutor recalling the various amounts of money Eisenman's Theranos stock was worth at different times. "What's your understanding of the worth of your Theranos stock today?"

Eisenman: "It’s not an understanding. It’s a conclusion. It’s worth zero."

Judge Ed Davila tells Alan Eisenman that he's not excused yet. Eisenman presses the judge and wants to know if he'll be able to catch a 6:45 flight tonight. Judge Davila says he probably won't.

Trial wrapped for the day until tomorrow morning at 9 a.m., where it sounds like we'll likely have a new witness. No word on who that witness might be. ✌️

Theranos investor Alan Eisenman came under fire yesterday for his many emails - both to Holmes and federal prosecutors, who repeatedly told him they couldn't talk to him about the case during a trial break. Here's my recap of the courtroom drama! law360.com/articles/14404…