This week, the third month has started of the criminal trial of Elizabeth, who’s the founder of Theranos. This week it’s more about focusing on how did this failed startup of blood-testing got so much response and investments from a lot rich familie.
This week there were 4 new witnesses who took stand, one of those four is Daniel Mosley. He is an investor who helped them to fund their failed blood-testing startup with more than $400 million fund. According to him, Henry Kissinger who one of his old client and is a former Secretary of State, introduced him to Holmes and Theranos and later introduced Holmes to a who’s who of prominent households.
Once Elizabeth hailed as the next Steve Jobs, she’s now been facing a lot of federal fraud charges due to the allegations on her saying that knowingly misled so many people including investors, doctors, and patients about her company and lied about her company’s capabilities of blood-testing that too just for the sake of money. Holmes has pleaded not guilty and will now be facing up to 20 years in prison.
Mosley, a former partner at the prestigious New York law firm Cravath, Swaine & Moore, testified Tuesday that he first learned of Theranos in 2013 through Kissinger, a long-time client. According to Mosley, Kissinger described Theranos as a “terrific company.”
Kissinger only asked Mosley to take a look at Theranos and give him his thoughts. Mosley not only put $6 million into the company, but he also introduced Holmes to a number of “high-quality families.”
The Waltons, whose patriarch founded the retail giant Walmart (WMT), John Elkann, the heir to an Italian auto empire that includes Ferrari and Fiat, and the billionaire family of former US Education Secretary Betsy DeVos were among those who made the list. (Last week, Lisa Peterson, a managing director at RDV who helped vet the DeVos family’s Theranos deal, testified about the investment.)
According to a court document, Mosley’s clients and acquaintances put in a total of $403 million in Theranos, with the Waltons and DeVoses putting in $150 million and $100 million, respectively. Mosley stated that he did not encourage them to invest, but rather assisted them in connecting with Holmes.
Mosley testified that he was concerned about provisions in the company’s share structure and that he was aware of the risks involved in investing in its ambitious mission, but he went ahead and did so “because I thought it was a very, very attractive opportunity that was going to be very, very good for people.”