Elizabeth Holmes called out on timing of insider trading defense

Elizabeth Holmes has refocused her defense on the issue of insider trading on Friday.

About the time Holmes spoke to investors about Theranos’ new financial situation in March 2015, she and several employees realized the company was going to run out of money in the next few months. And, the company needed to raise money to pay for its manufacturing costs.

“We knew the fact that we would run out of money didn’t sound good to investors,” and Holmes knew this, a former Theranos employee told the board of directors.

But Holmes didn’t tell the board about this when she spoke at a meeting of Theranos investors just a few days later, according to the former employee.

Theranos’ board was told it needed $350 million to stay open in 2015. Holmes’ current attorney George Kelly told the court on Friday he will show the board of directors that the company was not in imminent financial distress in March 2015, and was in no imminent financial distress as of January 2016.

Holmes, through her defense team, argues that she did tell the board of directors of the company’s “imminent” money crisis.

Earlier in the week, after five hours of questioning from defense attorney Meredith Moreland, Holmes became frustrated with the court room proceedings and gave up her personal cellphone to a member of the public and walked out of the courtroom.

This early break in testimony was not unusual for Holmes during her days on the witness stand, according to her legal team. She walked out of a previous Theranos meeting with a group of board members and abruptly stepped down, saying, “I don’t want to make any more of this,” according to a legal note given to the court by Holmes’ defense team.

CNN’s Allie Malloy and Ashley Killough contributed to this story.

Leave a Comment