Reaction to Mixed Verdict in Elizabeth Holmes Trial

Feelings Drama

Watch Reaction to Mixed Verdict in Elizabeth Holmes Trial - Feelings Drama on Dailymotion

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00:00Let's start with Theranos. We have video into the newsroom as we continue our breaking news

00:04coverage of the Elizabeth Holmes fraud verdict. Late today, the former CEO of Theranos and

00:09founder was convicted on multiple fraud charges. A jury in San Jose found her guilty on four of

00:1511 charges linked to money Holmes took from investors while promoting her medical technology,

00:22technology that didn't work. It's been an incredible rise and fall. We have a team of

00:27reporters at the federal courthouse in the South Bay. Let's begin with Scott Budman, who's been

00:31inside that courtroom almost every day for the past several months. Scott, just in layman's terms

00:37for us, what happened today and what comes next? I'll tell you, Raj and Jessica, things were a

00:44little chaotic outside when Holmes and her family walked out and we tried to get comment from her.

00:50Still stone face. She did not want to talk to anybody. She, her partner, her family walked out

00:55after being in the courtroom and hearing the verdict. I can tell you that in a court case that

01:01has been tense for months, there was nothing like this afternoon as the jury verdict was read.

01:07As you mentioned, four counts where Holmes was found guilty, four counts she was found not guilty

01:13and it bounced around. And so we weren't quite sure how this was going to go. And I imagine Elizabeth

01:19Holmes and her family was not sure how this was going to go. She sat stone face for most of the time.

01:25As the verdict was read, at one point she looked down and stayed looking down for a while. I noticed

01:31that the jury did not make eye contact with her as they came in or as they went out. It was that way

01:37for most of the trial. She would try to make eye contact with the jury, but they did not look back.

01:44After the verdict was read, the jury was thanked by the judge. Holmes turned around and hugged her family

01:50members individually before being ushered off into a room and then a little while later coming outside.

01:56It feels like quite the ending to an incredibly long and tense trial. And now the big question,

02:03what happens next? Holmes was found guilty of things that we see a lot here in Silicon Valley.

02:11Investors listening to entrepreneurs and writing checks. As someone who's covered venture capital

02:16and startups for a long time, I can tell you there is some nervousness tonight on Sand Hill Road and

02:21some nervousness, I imagine, among entrepreneurs and startups because Holmes was found not guilty

02:28on several of the charges involving patients, but she was found guilty on several of the charges

02:35involving investors. Send it back to you.

02:36Okay, Scott, we'll keep you there and also see you on our 7 p.m. newscast as well. Let's now bring

02:41in our legal analyst, Dean Johnson. Dean, you've been around a lot of these high profile trials.

02:45We've been talking about this one for months. Just right off the bat, your biggest takeaway from

02:49what happened about two hours ago. My biggest take is that this is really no surprise. In fact,

02:56it's exactly the kind of verdict I would expect. What the jury did was convict Elizabeth Holmes of

03:03investor frauds that occurred the last in time of the whole scheme. And that makes a lot of sense,

03:10because what we've learned in these business fraud cases is that often entrepreneurs start with the

03:16best of intentions, their businesses start to fall into crisis, and then they start cutting corners

03:23with the truth. And eventually they wind up saying things that simply aren't true to investors, and

03:28that's when they get convicted. And I've warned students in my business ethics class about this

03:33for years. This is exactly the sort of pattern we see all the time. Pretty interesting. Dean,

03:38okay, so she's guilty on four of the 11 charges. Who wins this case? Does the prosecution go home

03:44tonight thinking they clearly won? No. I mean, anything other than a complete across-the-board

03:52guilty verdict has to be considered a loss for the prosecution. U.S. attorneys very rarely go to trial.

04:00When they do, they go in only when they're sure of winning. And to split a verdict like this has to be

04:08considered a loss. And you have to say that these prosecutors very possibly made a strategic error by

04:15making a lot of this case about Elizabeth Holmes' personality. They called her a liar and a cheat.

04:21They played the personality game. The defense made a strategic decision to put her on the stand and

04:28let the jury see her personality. And let's face it, Elizabeth Holmes has a very studied personality that

04:34was capable of bamboozling some of the smartest and richest people in America. So they were playing,

04:40the prosecutors were playing in her wheelhouse. And that's probably why they lost on so many counts.

04:46Okay, Dean, perhaps the million-dollar question now. What does this mean moving forward? How much jail

04:51time, if any, will she see Elizabeth Holmes when she gets sentenced?

04:56Well, that's another fascinating question. The mathematics of federal sentencing is very

05:02complicated. The fact that she was acquitted of multiple accounts makes very little difference

05:08in the sentencing guidelines. The guideline sentence is still somewhere between 17 years and 24 years.

05:15The middle of that guideline would be about 20 years. What I would be doing at this point,

05:20if I were a member of the defense team, would be concentrating on sentencing and trying to convince

05:26the judge to depart from those sentencing guidelines to say, look, this is a young woman who started out

05:33with good intentions. She's a young mother. She has no prior record. Judge, you need to cut her a break.

05:41And so just to be clear, you're saying perhaps she might not face any jail time?

05:46Oh, I think she's going to face some jail time. I think she'll face some prison time.

05:50But certainly, you want to see this somewhere less than 17 to 20 years. She just had a child

05:57about a year ago. If she went to prison for 17 years, she'd miss that child's entire childhood.

06:03And I think that's the kind of pitch you've got to make to this judge, that this is not something

06:08that's really deserving of a double digit sentence. It's going to be fascinating to see what that

06:12sentence will look like. Thank you, Dean Johnson. We appreciate your analysis tonight. Our coverage

06:16will continue again at seven o'clock and online. You can get a breakdown of the jury's verdict

06:22and where we go from here. Just go to NBCBayArea.com.

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