Safeway Ex-CEO Acknowledged Risk of Partnering with Theranos Noting Company Gave at Least 100 Hrs of Due Diligence Before Deal

Urian B., Tech Times 12 October 2021, 11:10 pm

A former Safeway CEO known as Steve Burd gave a statement that his company actually knew that it was taking a risk when partnering with Theranos, the blood-testing start-up. He then acknowledged that a deal would have actually been good for the company's grocery chain's stock price.

Theranos Founder Elizabeth Holmes Criminal Fraud Trial

According to CNBC, on his second day testifying in the whole Therans founder Elizabeth Holmes criminal fraud trial, Burd noted to the jurors that Safeway went through a number of independent investigations into the company's claims regarding its technology. This was before they had signed an agreement that took place in 2010.

The deal was reportedly valued at about $400 million and resulted in 969 Safeway stores all being remodeled in preparation for the brand new blood-testing machines. Safeway had decided to dissolve its partnership with Theranos back in 2015, which was just two years after Burd had retired. The former Safeway CEO talked about the failed partnership with Theranos Labs, noting the company's delays were "red flags."

Ex-CEO Statements on Elizabeth Holmes

Although Burd was called as a witness by the whole prosecution, defense attorney Kevin Downey, who is now representing Holmes, took the ex-CEO to task regarding what he knew regarding Theranos when he had struck the whole deal. Downey then questioned if Burd knew that she was a very young entrepreneur referring to when she was within her 20s, and to this, Burd replied, "Correct."

Downey then continued to ask if it is fair to say in the process of doing the said deal, Safeway did hundreds of hours of their due diligence. Burd then noted at least 100, adding that he had also held himself "personally responsible" for the execution of the agreement.

Holmes Popularity on Silicon Valley

Holmes had reportedly rocketed to fame in Silicon Valley by reportedly developing technology that had promised to run hundreds of diagnostic tests with only a finger prick of blood. Theranos, however, never realized those aspirations. An article by Bloomberg noted that the deal cost them $400 million.

Holmes is currently charged with 12 counts of wire fraud and conspiracy when it comes to misleading investors and patients. She has reportedly pleaded not guilty. During the opening statements, Lance Wade, defense attorney, told jurors that despite making a number of mistakes which includes leading a failed start-up doesn't actually make her a criminal.

Elizabeth Holmes Faces 20 Years in Prison

Holmes is now facing up to 20 years in prison if she is convicted. With Burd remaining on the stand, the defense then tried to show that Safeway, a large national chain, wasn't actually duped in its own negotiations.

Downey noted that one would have communicated along with Theranos almost daily for over a year. The witness then responded that they were on a parallel path to do the whole deal and to do due diligence. As of the moment, ex-Theranos lab director's credibility is now being questioned by Elizabeth Holmes herself.

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Written by Urian B.