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Disgraced Tech CEO Plans Unusual Legal Strategy

Elizabeth Holmes will go after journalist who torpedoed company, reports Bloomberg
By Newser Editors,  Newser Staff
Posted Jun 29, 2019 3:17 PM CDT
In this 2015 file photo, Elizabeth Holmes speaks at the Fortune Global Forum in San Francisco.   (AP Photo/Jeff Chiu, File)

(Newser) – Elizabeth Holmes goes on trial next year on charges of criminal fraud, and Bloomberg reports that her legal team is working on an unexpected legal strategy. They're going after reporter John Carreyrou, whose investigative pieces in the Wall Street Journal led to the unraveling of Holmes' blood-testing company, Theranos. Holmes plans to argue that Carreyrou didn't just report on Theranos, but urged sources to file formal complaints against the company and exerted influence "on the regulatory process in a way that appears to have warped the agencies' focus on the company and possibly biased the agencies' findings against it," according to a court filing obtained by Bloomberg's Josh Rosenblatt.

The legal team is essentially saying that Carreyrou became a part of the story he was reporting on, and swayed regulators to come down harder on the company then they would have otherwise. The Journal, however, stands by Carreyrou's reporting. Meanwhile, a formal federal prosecutor tells Bloomberg the strategy could be dismissed in court as irrelevant—because the case is about Theranos' allegedly bogus biotech claims, not about Carreyrou. The trial is to start in July 2020, with Holmes and former Theranos exec Ramesh "Sunny" Balwani facing up to 20 years in prison and fines of $2 million, per the Journal. They also might have to pay restitution to those who invested in the company. (Read more Elizabeth Holmes stories.)

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