Holmes Trial Witness Says Theranos Went Years Without Financial Audit

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Elizabeth Holmes is on criminal trial in federal court in San Jose.

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The former financial controller at Theranos Inc. said the company run by Elizabeth Holmes, who is on criminal trial in federal court in San Jose, went years without having its financial statements audited.

So Han Spivey, who also goes by Danise Yam, managed the finances at Theranos from 2006 to 2017 and was the first witness in Holmes’ trial, The Wall Street Journal reported Wednesday.

Spivey said she thought it was unusual for a private company to go so long without having its financial statements audited by an outside firm—a process that, while not legally required, “gives credibility,” she said.

Holmes, the founder of Theranos, a company that claimed to have revolutionized blood-sample analysis, is standing trial on conspiracy and fraud charges alleging she defrauded investors and patients. The 37-year faces a possible 20 years in prison.

The former finance head at Theranos highlighted a period in 2009 when the company struggled to make payroll and struggled to pay vendors. Spivey had to “pick and choose” who to pay, and said the company managed to get by after taking out a loan backed by Ramesh “Sunny” Balwani,” Theranos’ former deputy and Holmes’ ex-boyfriend.

Holmes is expected to argue that her actions leading Theranos, which drew in hundreds of millions of investor dollars, were influenced by an abusive and manipulative relationship with Balwani, who will himself stand trial for fraud.

Spivey also began to discuss a chart of Theranos’ finances from 2009 to 2011 showing the company’s net losses ballooning—from $11.5 million in 2009 to $16.2 million in 2010 and $27.5 million in 2011.

The former financial controller’s testimony followed opening statements in the Holmes trial. Federal prosecutors said that Holmes’ claims about Theranos’ supposedly groundbreaking blood-testing device continued through the life of her company, drawing in investor cash and tricking patients.

Holmes was touted as the world’s youngest self-made billionaire when Theranos was valued at $9 billion—before the Journal published stories in 2015 raising questions about the effectiveness of the company’s technology. 

Lance Wade, Holmes’ attorney, argued that Theranos’ failure wasn’t the result of fraud, saying that the company filed 176 patents and produced blood tests cheaper than competitors.

Spivey’s testimony was cut short when the court ended at 2 p.m. Pacific time. Court will be back in session Friday. As Barron’s reported on Wednesday, the Holmes trial has brought the spectacular collapse of Theranos back into the spotlight and raises questions about the culture of hopeful exaggeration in Silicon Valley.

Write to Jack Denton at

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