Elizabeth holmes trial

Big Time Investor Says He Believed Theranos, and Paid a Big Price

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Jurors heard from yet another big time investor in Theranos as the federal fraud trial of Elizabeth Holmes continues in Silicon Valley.

Brian Grossman testified and said he believed what executives told him and paid a big price.

He told the jury he was so impressed by what Theranos was doing, he and his San Francisco investment firm invested $96 million in the company back in 2014.

Elizabeth Holmes and her partner Sunny Balwani told Grossman that Theranos had a major contract with the U.S. Defense Department and that Theranos machines were being used in the field of battle, but none of it was true.

Some may dismiss claims like these as simply Silicon Valley "fake it 'till you make it" exaggeration, but Ann Skeet, Senior Director for Leadership Ethics at The Markkula Center, thinks Holmes crossed a line.

"The sort of 'hype it, pretend it' has more of an upside than it potentially does," se said. "Saying you have $200 million from department of defense contracts when you don't its flat out fraud. Very different than saying 'here's a potential to our product or an upside we think we can achieve at some point."

Grossman's firm sued Theranos in 2016, settling for $46 million.

His testimony is part of a trial Skeet said will affect how people see Silicon Valley for years to come.

"We want Silicon Valley to be known as a place where great things are created, and it is a place where great things are created," she said, "but you want it known as a place that does that in the best and most ethical ways of doing that."

Grossman testified that at one point, he went into Walgreens for a Theranos test and was surprised that the test used a needle and took four hours to show a result, which is contrary to what Theranos said its test could do.

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