The trial in a US federal court in San Jose promises to be one of the most high-profile tests of alleged wrongdoing in Silicon Valley, which is experiencing a historic boom in start-up funding.
Earlier, a US prosecutor said Holmes had intentionally duped investors and customers of the once high-flying start-up in order to get rich. "This is a case about fraud, about lying and cheating to get money," assistant US attorney Robert Leach said.
Prosecutors sought to link Theranos's business struggles with Holmes's behaviour, claiming the company came close to financial ruin at least twice if it could not raise additional capital.
"Out of time and out of money, Elizabeth Holmes decided to lie," Leach said.
Holmes faces 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. She has pleaded not guilty. If convicted, she faces a maximum sentence of up to 20 years in prison.
She arrived at the San Jose courtroom wearing a grey skirt suit and light-coloured shirt, a departure from the black turtleneck that was her sartorial trademark at the height of her fame.
Theranos, which was founded by Holmes in 2003 and headquartered in Palo Alto, appeared to be a successful start-up that had discovered new ways to perform dozens of medical tests using small amounts of blood. In 2014, investors valued the company at US$9 billion ($12.6b).
But prosecutors from the US Department of Justice indicted Holmes and Ramesh Balwani, former president of Theranos, in 2018, alleging that they falsely promoted the company's technology despite knowing it had issues with reliability.
"The main thing is going to be for the prosecutor to show that she knew these tests were not working," said Cheryl Bader, an associate professor of law at Fordham University and a former federal prosecutor.
The prosecutors also allege that Holmes and Balwani misrepresented Theranos's financial position to investors, claiming the company would make US$1b in revenues in 2015 when it only had modest sales.
Holmes's attorneys have previously sought to dismiss the case, arguing that the indictment was too vague. Judge Edward Davila denied their motions in October last year.
In March 2020, Davila ordered that the two defendants could have separate trials. Attorneys for Holmes have argued that Balwani, who is also her former boyfriend, abused the Theranos founder, affecting her judgment. Balwani has denied the claims.
Prosecutors have submitted a list of possible witnesses that includes Henry Kissinger, a former board member; lawyer David Boies, the company's previous outside counsel; and media mogul Rupert Murdoch, who was an investor in Theranos.
Lawyers for Holmes have said they could call for testimony from John Carreyrou, the former Wall Street Journal reporter whose investigation into Theranos helped precipitate the company's downfall. It is unclear whether Holmes herself will testify at the trial, which is expected to last for several months.
Written by: Miles Kruppa
© Financial Times
