The lab director testified that he felt pressured by management to defend lab tests despite the inaccuracies, multiple media sources report. For example, in several email exchanges with Holmes’ brother Christian Holmes, Rosendorff was asked to come up with “constructive” ways of dealing with a doctor who was questioning the results of a cholesterol test performed by one of Theranos’ machines.
Rosendorff said that he told Christian Holmes that, “if you are asking me to defend these values, then the answer is no,” NBC Bay Area reports. Rosendorff also said in the email exchange that he thought the most “constructive” thing for the company to do regarding the inaccurate tests was to offer “reliable and robust” tests and to not “spin” the situation. He also stressed the importance of being honest and transparent with Theranos patients. Christian Holmes forwarded that email exchange to his sister and said that he was “at a loss” on dealing with Rosendorff.
Defense attorney Lance Wade asked Rosendorff if he offered lab tests he knew were inaccurate and unreliable, CNBC reports. The former lab director testified that he did not provide the lab tests and ordered the lab to discontinue all testing from those tests and eventually raised his concerns to management.
On Sept. 24, Rosendorff said in court that he raised the issues related to the inaccuracies of tests to Holmes rather than former president and COO Sunny Balwani because he thought it would have more impact since Balwani frequently dismissed concerns. He testified Tuesday that Holmes never told him to report inaccurate results.
Rosendorff eventually resigned from the young Silicon Valley company in late 2014 because he alleged that Holmes was not willing to address quality-control problems with the Edison machines before the Walgreens launch, Bloomberg reports. He testified on Tuesday that he received a phone call from former Wall Street Journal reporter John Carreyou and spoke to him off the record about the happenings behind the scenes at Theranos.
“I felt obligated to alert the public,” Rosendorff said during his testimony, Bloomberg reports. “I didn’t quite know how I should do that. But when this opportunity presented itself, I took advantage of it.”
Carreyou’s reporting famously helped dismantle the company and eventually led to the release of his book “Bad Blood: Secrets and Lies in a Silicon Valley Startup.” Rosendorff testified that he was mentioned in the book under the name Alan Beam, Bloomberg reports.
Rosendorff is expected to take the witness stand again today.
Holmes and Theranos were once believed to be the next shining stars of Silicon Valley. Holmes claimed her company would revolutionize blood testing with technology that could analyze tiny amounts of blood and inked retail partnerships with Walgreens and Safeway. Forbes in 2015 recognized Holmes as America’s richest self-made woman based on Theranos’ multibillion-dollar valuation at the time.
Investigative reporting soon dismantled Holmes’ technological claims, raising questions about whether she and others misled investors. The downward spiral culminated in the 2018 shutdown of the company, with the U.S. Securities and Exchange Commission accusing Holmes and Balwani of what it described as a “massive fraud.”
Holmes, along with Balwani, faces 10 counts of wire fraud and two counts of conspiracy to commit wire fraud over allegations that she knowingly misled investors by claiming Theranos technology could revolutionize blood testing. They have both pleaded not guilty to all charges.
Balwani’s trial is expected to follow the Holmes trial.