The very first question outside the courtroom in the Elizabeth Holmes trial Thursday afternoon came from Hayward, CA resident Ronald Schmitz. He wanted to know why Holmes repeatedly refused to participate in an analysis of data from the company’s sleep testing device, Ambien Dream.
During the trial’s first week in August, Schmitz testified that he attended a Wednesday executive meeting, where the decision was made to scrap the sleep tests. He was so frustrated with Holmes, he decided to attack her body at an upcoming meeting of the University of California, San Francisco board of overseers. He snapped when he saw how Holmes tried to excuse herself by saying, “I have to go right now because I have to vomit.”
For the last several weeks, Schmitz has been aggressively asking the questions Holmes and other defendants in the case have refused to answer. His questions have pertained to aspects of a pre-Wall Street Day presentation Holmes gave in July, which is noted for including patented allusions to complex clinical testing and systems that may potentially conceal the effects of Ambien in the human body.
Holmes’s attorneys have advised her to decline to testify during her trial. Asked Wednesday why, they replied, “She is unhappy about giving testimony, and if she gives testimony, she is likely to be cross-examined about her reliance on development projects as the basis for her articles. In that case, she will testify about something that is entirely unrelated to [the matter in this case].”
However, Schmitz’ questions and the testimony of a series of witnesses have given the Holmes trial a strikingly similar legal atmosphere to one that was pursued in the LIBOR-rigging and money laundering trial of former Barclays CEO Bob Diamond. Diamond, too, had given pre-Wall Street Day speeches in which he harangued others to take massive gambles by focusing on intangible “expected” profits. He frequently used other investors and board members to make this claim, a risky and manipulative strategy that prosecutors allege brought him pain in 2011 and paved the way for a securities fraud indictment later that year.
Early on in his questioning, Schmitz challenged a defense suggestion that many of the Ambien Dream testing results showed no significant product spillage. At trial, the quality control of the sleep testing device received microscopic attention.
Specifically, Schmitz asked about a report that showed a correlation between the results of the Sleep Device ID Sleep Sensation II lab work and data from the Sleep Product ID Sleep Sensation System (SPSS) sleep testing data. The defense had suggested that SPSS data was merely “reporting” the results from the sleep testing device.
One of Schmitz’ other questions brought testimony from the lead researcher of the sleep testing device, Keith Johnston. He testified that he and others in the labs began accumulating test data on the Ambien Dream sleep testing device over a year prior to the trial’s presentation in July. Evidence submitted showed that many of the test reports for the Ambien Dream sleep testing device were identical, without any assumptions being made about what researchers might expect from the tests.
Although the name of the sleep testing device was changed at some point in the middle of 2014, it appears that the testing was still done on Ambien Dream and other Ambien sleep testing devices. The use of identical sleep testing test data to more effectively promote the products of one company was perceived by a now-former corporate manager at Valencell as “rampant duplication” at the corporate level, according to testimony.
Meanwhile, another technician, Ken Clark, claimed during his testimony that previous reporting discrepancies in the Sleep Product ID Sleep Sensation System testing data were further magnified by differences in the testing of different Ambien products.
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Schmitz questioned Valencell employee Veronica Hernandez on discrepancies in data seen in two study patients from different Ambien sleep testing devices. The difference between the results of the sleep testing devices differed more than he had anticipated.
Ultimately, there’s no telling which side will finally be proven right in the Elizabeth Holmes trial.
