I spent this morning watching the Elizabeth Holmes trial and it’s the most interesting day yet. The witness on the stand was a feisty Alan Eisenman, who was part of an investor group from Houston that put money into Theranos in 2006. He was in a battle of wits and will with Downey, the defense lawyer. Downey was winning.
I didn’t hear the direct examination testimony, but it was clear that the gist of it was that the Houston group invested based on representations by Holmes and Balwani that were later shown to be untrue. Under cross, Eisenman did well at first, resisting Downey’s attempts to put words in his mouth. For example, Eisenman had repeatedly asked for financial information from Holmes over a period of months or even years without getting what he wanted. Holmes would keep emailing back that she could not provide the information he requested and she was getting frustrated at his continued requests. Downey showed him an email that said as much and asked if he understood that Holmes was frustrated. He replied, “I understood that she was hiding something.” So far so good.
But as the cross dragged on, Eisenman became more and more belligerent and refused to acknowledge even the most obvious things, things in print right in front of him in emails he’d received. For example, there was one email from 2015 in which Balwani tells Eisenman that investing in a biotech startup is inherently risky and that Eisenman had acknowledged that. Downey asked him if he remembers receiving that. Eisenman kept refusing to answer directly and instead just kept saying “It’s a lie. That contradicts everything he’d told me before that,” or words to that effect. Downey then showed him a form Eisenman had signed at the time of his initial investment where he acknowledges that risk. Eisenman’s response was that it was boilerplate that all startup offerings say, but that that is not what Holmes and Balwani told them. It took five or ten minutes of verbal wrangling before he finally acknowledged that he did receive that email and did sign that form. His credibility was badly damaged, and, surprise, surprise, the wrangling caused yet more unexpected delays.
During the break the lawyers argued about Eisenman’s notes from the time he first met Holmes. The defense had subpoenaed them, but they hadn’t yet been made an exhibit or entered into evidence. The witness turned the forty pages over to the court clerk when ordered by the judge and the lawyers examined them during the break, When they came back the defense wanted to cross-examine the witness about why there were two colors of ink on one page. The prosecutor argued that that line of questioning should be out because the defense was trying to imply that the witness had altered the notes later when there was no basis in fact for that. The judge seemed to feel it didn’t make much difference because the notes weren’t in evidence and all that matters is what the witness testified to, even if he did use the notes to refresh his recollection. As usual, the judge didn’t seem able to make a quick ruling and deferred the issue. After break the cross-examination resumed and it was more sparring. The witness looked even worse when the defense brought out another document showing that even after Eisenman had been complaining about being shut out by Holmes, he still invested more money in 2013.