Elizabeth Holmes’ partner in blood-fraud scheme largely anonymous. Theranos–the Movie–already in the works.

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The News:

Theranos, the humiliated, disintegrating, and allegedly fraud- packed blood-testing startup, is most often related to its founder and CEO, Elizabeth Holmes. But during the rise and fall of Theranos, one of the company’s top executives stayed mainly out of the spotlight and under the radar: its then-president Ramesh “Sunny” Balwani.

Turns out that a new profile by unfaltering Theranos watchdog John Carreyrou sheds light on this major but mostly anonymous figure, suggesting some of Theranos’s worst transgressions weren’t Holmes’ doing at all.

Balwani was 37 years old and already a multimillionaire when he met Holmes, then 18, at a Stanford University language-learning program in China in 2002. According to reporting in the Wall Street Journal by Carreyrou, who has spearheaded efforts to uncover deceptive practices at Theranos, Balwani helped defend Holmes from bullies during that stopover, and soon became her mentor. Within three years, Balwani had divorced his wife and was living with Holmes.

Though Holmes founded Theranos in 2004, Balwani was not directly involved until 2009. That’s when Balwani guaranteed a $12 million loan to keep the capital-intensive company going and became president and COO.

Former employees told Carreyrou that Balwani was both a flashy and overbearing presence, driving exotic cars and frequently berating employees. Balwani also reportedly fired Theranos employees so often that they were referred to as being “disappeared,” a phrase normally associated with despotic political regimes like those of Augusto Pinochet and the Nazi Gestapo.

In particular, Balwani and Holmes fired or marginalized employees who raised concerns about the company’s working conditions, test results, or product claims. Balwani reportedly leaned on lab workers to reveal which of them had written a negative note about the company on the jobs site Glassdoor, while also ordering the company’s HR staff to write fake positive reviews on the site.

Though Holmes played a direct role in many of the most notorious episodes in the Theranos story–including displaying a fake laboratory to Vice President Joe Biden–it was Balwani who left the company after the depth of its problems became clear. Though the departure was framed as voluntary at the time, a source close to Holmes told Carreyrou that the CEO actually fired Balwani.

Unlike Ms. Holmes and Theranos, who reached a settlement with the SEC to resolve the agency’s civil charges in March without admitting or denying wrongdoing, Mr. Balwani has denied separate charges the SEC filed against him in a parallel action and is fighting them in a California federal court. He and Holmes are, unsurprisingly, no longer a couple. (Ref: Carreyrou, 5/18/18; Wall Street Journal)

Steve’s Take:

I’ve covered the Theranos saga since its unraveling began several years ago and written pieces about the slow but sure demise of Ms. Holmes and her company for this blog.

But I, and apparently quite a few other observers, hadn’t a clue about mystery-man Sunny Balwani, who we now learn was as integral to the Theranos epic as Ms. Holmes. He somehow stayed out of the spotlight, which is all the more impressive as girlfriend and Theranos CEO Holmes exploded onto the national scene, extolled as the youngest self-made female billionaire.

Steve's Take: The shadowy Ramesh 'Sunny' Balwani played an integral part in the @Theranos epic along with Elizabeth Holmes Click To Tweet

But her net worth was revised down to nothing after a journalist started digging into the technology behind her blood testing startup.

In a new book out yesterday (5/21), by Wall Street Journal investigative reporter John Carreyrou, sheds light on what went on behind the scenes of the disgraced company. The book, “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” focuses on understanding the culture at Theranos and the dictatorial leadership that steered the startup to its one-time valuation of $9 billion, says CNNMoney.


Theranos aimed to create cheaper, more efficient alternatives to traditional blood tests using its proprietary technology. But after Carreyrou, a Pulitzer Prize winning reporter, called into question its technology and testing methods in 2015, the company voided two years of blood tests. In May 2018, the SEC charged Theranos with “massive fraud” involving more than $700 million.

The company remains the subject of an ongoing criminal investigation by the Department of Justice.

A whole nother Holmes

Following interviews with more than 150 people, including 60 former Theranos employees, Carreyrou paints an astonishing picture of what it was like working for Holmes. She was said to have unrealistic expectations, according to Carreyrou, when it came to the startup’s blood testing technology and its workers, requiring engineers to work around the clock to speed up development.

“This was an incredibly ambitious woman. She wanted to be the second coming of Steve Jobs. It was an ‘ends justify the means’ situation. Perhaps she thought [Bill] Gates and Jobs faked it until they made it so why not her too?” Carreyrou told CNNMoney.

Theranos: The Movie

In the opening pages of “Bad Blood,” the chief financial officer for the blood-testing company Theranos meets with his boss, Elizabeth Holmes, a charismatic 20-something Stanford University dropout, and warns her that the company must stop lying to its investors.

Holmes’s expression turns icy. She informs him that he’s not a team player. Then she fires him on the spot, says Jennifer Couzin-Frankel for Science in a book review of Carreyrou’s bona fide “thriller.”

Variations on this story recur throughout this engrossing new book by Carreyrou. The fraud that fooled everyone from Walgreens to US statesmen is almost too improbable to be believed. Holmes, vindictive and paranoid, and the company’s number two, Sunny Balwani, a bully almost 20 years her senior with whom she was in a romantic relationship, are pitted against employees frantic that patients will be harmed by a technology that doesn’t work.

But if the scientific fraud is impressive, it’s Holmes’s reportedly ruthless treatment of anyone who challenged her that makes “Bad Blood” hard to put down, Couzin-Frankel says. Theranos, Carreyrou writes, was a revolving door, as Holmes and Balwani fired anyone who voiced even tentative doubts. Company emails were strictly monitored; legal threats were frequent and aggressive. The family of one employee allegedly spent hundreds of thousands of dollars in legal fees to protect themselves.

“Bad Blood” boasts movie-scene detail–indeed, a film based on the book is under way. In one passage, for example, Holmes’s father flies a paper airplane toward her during Christmas dinner, with “PHD” written on the side. “No, Dad, I’m not interested in getting a PhD, I want to make money,” she tells him.

Bottom Line:

Vanessa Friedman of The New York Times wrote a brilliant piece last month about the fashion choices of Elizabeth Holmes and the deliberate use of her apparel to get as far as she did, fleecing some very smart investors out of hundreds of millions of dollars for her Theranos scam.

Ms. Friedman says, “Unsurprisingly, there have been the usual post-mortems and recriminations; the taking over our desire to impart special powers to the young disrupters of the digital age; and our obsessions with the brilliant-dropout narrative and overinflated valuations built on unproven products.”

For Friedman, though, “This tale has a different message; one that has to do with the risks and rewards of creating an instantly identifiable image. And I wonder: Will black turtlenecks ever be looked at in quite the same way again?”

Friedman continues: “Her sartorial story is, after all, the underside of the Steve Jobs sartorial story. They both used practically the same garment as a ‘signifier.’ This was almost never considered a coincidence. But what at first looked like a smart strategy by Ms. Holmes, visually connecting her to a globally recognized game changer, has now backfired in ways that are relevant to us all.”

Early on, Friedman judges, Ms. Holmes seemed to absorb the example of Mr. Jobs in terms of reality distortion and her own mythmaking.

“She saw the advantage of consistency in style, of adopting what had become the techie’s equivalent of the heroic uniform, at least as read by the outside world,” said Friedman.

Let’s face it: Holmes was the face of Theranos. Plenty of actresses come to mind who could portray her. You might have your own favorite candidate. As a matter of fact, Fox Business News today reported that Jennifer Lawrence will star in the movie.

But who plays enigmatic Indian-American Sunny Balwani–the real brains behind the tale, and who may yet escape completely unscathed, by simply…vanishing?

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