Thread by @MilesGCohen

#ElizabethHolmes trial day 27:

Our first full week of trial — which will likely end in the prosecution resting their case, they revealed last Wednesday.

Investor Alan Jay Eisenman will be the witness this morning. He is on cross and is expected to finish by EOD (1 p.m. PT)

Eisenman is back on the stand. Downey began by asking the investor if he recalled a quarterly meeting call he had with Holmes in March 2010.

Eisenman said he did not recall.

"I have a whole trail of notes over [several] years," Eisenman said about a potential IPO, evading Downey's question about whether or not Holmes mentioned an equity offering in that 3/2010 call.

Downey refreshed Eisenman on the 3/2010 call with a May 2010 email from Holmes which referred back to that call.

In the call he remembered Holmes talked about being in the process of negotiating agreements with retailers.

“I’ll ask you the same question for the third time,” Downey told Eisenman, who was in the midst of a question line about the information Holmes was not sharing the investor.

His line:

First Downey referred to the witness as a "sophisticated investor."

"You are aware that there are restrictions on the information a company can share during the period it is making an equity offering?" he asked

"...Aware that if a potential investor receives or discovers info...that other investors don’t have then that investor might be under restrictions as to whether it can share that information." Downey continued.

Downey showed a July 2010 email chain where we see Eisenman ask for information.

“Per my previous email, I will call you as soon as we have something concrete,” Holmes replied.

“Then you sent another email that is really just a reminder or a further request,” Downey continued

The chain culminated in this email from #ElizabethHolmes:

"Your continued daily calls and emails after we’ve already told you multiple times that we do not have additional info we can disclose beyond what we’ve already shared with David are upsetting to us," she began.

(David Harris being the Theranos investor who introduced Eisenman to Holmes, and served as the financial advisor for the CEO's family.)

"Once we have additional info we can share with you we will contact you as mentioned multiple times before," she finished her email.

"Did you understand [#ElizabethHolmes was frustrated that you kept asking her for info she had already told you she wasn’t in a position to disclose?" Downey asked.

Eisenman again evaded the question, saying he was "under the impression she was hiding information.”

Struck^

"Fair to say from the testimony that you gave on Wednesday of last week that you felt frustrated by the fact that you couldn’t get the info from #Theranos individually?" Downey asked.

"Individually and collectively," he testified.

Downey is showing example after example of Eisenman requesting information via email. In one response, Holmes characterized his comms as "daily."

"Is it true that you were calling daily and emailing the company," the defense attorney asked.

"Thats an exaggeration," he said.

At one point, Eisenman reached out individually to then chair of the Theranos board Don Lucas, Downey elicited as Eisenman testified last week.

Lucas' executive assistant Nancy Minnig wrote to Eisenman in May 16, 2012.

"I spoke to Don and he doesn't have any further information at this time," she emailed the investor.

Eisenman sent a frustrated email to Holmes in Nov regarding Lucas, which we saw on direct.

We see Holmes' response on cross:

Then Eisenman reached out to another board member, the former Tennessee Senator Bill Frist, Downey elicited.

Eisenman said he was a family friend.

-You asked [Mr. Frist] questions about Theranos

-Ultimately he stopped communicating with you about theranos as well

"My talking to Senator Frist was totally appropriate," Eisenman veered.

"Lets talk about the events that happened on Wednesday [after your testimony]," Downey began.

He asked if Eisenman recalled he was told not to discuss "any substance" of his testimony with prosecutors.

"How long did it take you to violate the direction that was given to you?" Downey asked.

"Was it less than 15 hours?"

We find out Eisenman emailed Agent Hernandez (who sits at the prosecution table) "to get some feedback/guidance about how you thought your testimony was going," Downey phrased, and Eisenman agreed.

Hernandez called Eisenman up, and told him not to talk to communicate government.

"How long did it take from that call to the next time you emailed the government?" Downey asked

Eisenman shot back and forth with Downey, talking over him, and then asked the attorney to show him the email because "I don't know," the witness testified.

We find out it was the next morning.

And then the government called Eisenman, "and this time it wasn’t just Agent Hernandez," Downey said. "Mr Bostic the lawyer for the gov called you as well."

He told Eisenman not to communicate further with the government.

Downey perhaps not so coincidentally moved back to Eisenman's communications with Theranos members.

"You did not speak to Ms. Holmes before you made your 2013 investment in #theranos, is that true or false?

"My recollection is I spoke with sunny balwani."

-You dont recall as you sit here today speaking to Ms. Holmes about your 2013 investment

"correct"

"You do recall speaking to Mr. Balwani," Downey hammered in.

Downey is now trying to refresh Eisenman on his recollection that Balwani did not describe #theranos' activities during his calls with the witness in 2013.

Even the court reporter has joined the fray of voices. She has had enough of the voices talking over each other.

Eisenman doesn't recall

What Balwani did tell Eisenman, as the witness agreed to, was that he could look at the " info that is available to everyone else," before making his investment.

“I think these emails are beyond ridiculous," Balwani wrote Eisenman in Jan. 2015, after he made another request for info.

"You continue to bombard us with 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 and that management will NOT be spending anytime with you."

"Is it fair that you did not respond to or dispute at all when Mr. Balwani made that statement to you...?

"In 2013 he did not discourage me," Eisenman shot back.

"You did not dispute in this email in 2015 that Mr. Balwani had discouraged you from investing prior to the time you made your investment in 2013?" Downey asked.

He is not giving up on this question, despite Eisenman's pushback.

Back in 30 for more.

Lawyers are staying after to discuss a subpoena Mr. Downey filed for an original copy of Eisenman's notes.

Judge wants to take the discussion "in the back"

Eisenman is returning to the courtroom.

Eisenman refused to hand them over during cross examination, but upon the judge's order he gave them to the courtroom deputy.

Downey mentioned the possibility of bringing an expert in to review the notes

Downey reviewed the notes which Eisenman testified to on direct (but were not admitted). Downey's one over confirmed his concerns about the integrity of his notes, he told the judge

He asked for an opportunity to conduct a full forensic analysis on them.

"As I suspected there are some indications in the notes that the notes are not what Mr. Eisenman described...as being contemporaneous notes with Ms Holmes," Downey told Davila, citing the insertion of Pharma company names in a different colored ink, among other reasons.

“The witness was aggressive in trying to read his notes…Likely the remedy is to strike that testimony," Downey told the judge.

Bostic disagreed, saying the suggestion the witness doctored the notes is not substantiated.

"I'm not alleging anything... What makes it important is for a substantial proportion of [Eisenman's] direct he was looking at the document in question," Downey clarified. It surely informed Eisenman's testimony, Downey noted.

If not given an opportunity to forensically analyze the notes, Downey requested to examine Eisenman outside of the presence of the jury.

"I'm not 100 sure of that," Downey said about ending at 1 p.m.

"The time estimates are a little fuzzy," Davila told the attorneys.

Davila said he would allow Downey to Voir Dire Eisenman on a limited basis.

Downey asked for more time given the notes are 40 pages and he's only had 30 minutes to look over the notes.

Downey will get the time, and the jury + Eisenman will be brought back in.

The deputy will make a color copy of Eisenman's notes.

"Do you recall before we broke, that we were talking about your conversation w/ Mr. Balwani prior to your investment in 2013?" Downey asked Eisenman.

"... My personal assistants are not privy to confidential financial information so please don't leave messages w/ them about the company's financial details...," Balwani wrote Eisenman on Dec. 29 2013, just days before his New Years Eve investment.

You acknowledge that Ms. Holmes told you in 2010 that theranos was an early stage life-sciences (ESLS) company that carried immense risk?

He did

And you acknowledge that she told you in 2010 that Theranos status as an ESLS startup might not change for years to come?

He did

We are looking at the stock purchase agreement for Eisenman’s Dec. 2013 buy-in.

Downey pointed to the "speculative nature of investment" section which said "the Company has a limited financial and operating history."

“This is boilerplate," Eisenman said. “This contradicts everything I understood up to this point.”

He told Downey he had no power over the language.

Downey asked Eisenman if Theranos put a gun to his head and told him to invest.

Downey's next line focuses on an offer Eisenman got from Theranos to buy back his shares at $15/per. Somewhere between, $30 and 35 million.

Eisenman said the company never followed through.

But Downey showed an email between Eisenman and Chris Boies (relative of David) which showed Eisenman asking about a post-money round worth $19 share.

You thought [your investment was] probably worth another $4 a share?” Downey asked.

(the exchange was in Aug. 2015.)

In Sept. 2015 Eisenman elicited assistance from “SharesPost.”

“They match buyers and sellers [of shares] and they take a commission,” Eisenman testified.



In an email a SharesPost employee told Eisenman, "we have a large block of sellers at $19 per share."

"How is that relevant?" Eisenman asked.

Downey is not taking the bait. He continued his line.