Defense In Elizabeth Holmes Trial Shows Investment Managers Steered Clients To Theranos Despite Warning Signs
SAN JOSE (KPIX 5) -- An attorney who steered several billionaire families to invest in Theranos testified that he knew there were big risks with the company, but he recommended backing Elizabeth Holmes' company anyway.
Daniel Mosley testified that in 2014, his clients including the Walton, DeVos, and Cox families, former Secretary of State Henry Kissinger, and others were excited to be invited to invest in Theranos by Holmes.
Mosley said he reviewed Theranos documents projecting revenues of 990 million dollars for 2015. But he also said he couldn't find a basis for such big estimates and that he knew investors could lose their money.
Still, he recommended his clients buy in and they invested a combined $384 million into Theranos. Mosely himself invested $6 million of his own money.
"Basically, what the defense is alleging is that these investors should have known better. They were sophisticated investors and they were told in writing that this was highly speculative, and they were taking a big risk here," said legal analyst Michele Hagan.
"What the defense is trying to do is shift the blame to say it wasn't Elizabeth Holmes who made these representations, they made their investment decisions based on what their representatives told them," Hagan said.
Mosley also testified that he relied on a glowing 2014 Fortune magazine cover story about Holmes and Theranos and the opinion of his friend, Dr. Kissinger, who described Holmes in an email as "strong, having an iron will and determination."
Kissinger wrote at the time that he hasn't seen anyone with her "special attributes."