WSJ Reporter Carreyrou Heralds Former Theranos Lab Director's 'Courage' For Leaking Technology's Shortcomings
SAN JOSE (CBS SF) -- Wall Street Journal reporter John Carreyrou has taken to social media, identifying for the first time that former Theranos lab director Adam Rosendorff was the original source of his reports on the failures of the startup's blood-testing technology.
Dr. Adam Rosendorff testified on Tuesday that he spoke off the record with Carreyrou.
When asked by assistant US Attorney John Bostic why he decided to speak to Carreyrou, Rosendorff said, "even months after I left the company, I felt obligated from a moral and ethical perspective to alert the public. I didn't quite know how I should do that, but when this opportunity presented itself, I took advantage of it."
Carreyrou's investigative reporting uncovered significant flaws in the company's technology and capabilities that contradicted claims made by Holmes and Theranos. His work prompted broader scrutiny into the company, which led to its eventual demise.
After the courtroom revelation, Carreyrou tweeted: "Adam was my first and most important source. Without him, I wouldn't have been able to break the Theranos story. Hats off to his courage and integrity. He's one of the real heroes of this story."
Rosendorff's testimony now sets the scene for prosecutors to call Carreyrou to the stand.
Rosendorff told jurors that in October of 2014, Theranos was getting so many doctor complaints about faulty blood tests that it, quote "reached a crescendo."
He said Elizabeth Holmes and her boyfriend and business partner Sunny Balwani pressured him to defend the technology to other doctors, which he refused to do, so he quit.
The prosecutor pointed to a text exchange the next month that had Holmes bragging to Balwani that she raised 150 million dollars from Walmart heiress Alice Walton and "over 100 million" from media mogul Rupert Murdoch.
"It can be argued that it goes to fraud," said Legal analyst and former prosecutor Michele Hagan.
"She did not disclose what she knew or what she was advised that she was having accuracy and reliability problems with the Edison machines and yet took in what -- 250 million dollars?"
Defense lawyer Lance Wade then launched into a vigorous cross-examination, raising his voice and pressing Rosendorff to admit that as lab director it was his responsibility to enforce quality control.
Wade then defended another Rosendorff complaint that Theranos was too secretive. He drew a comparison to Apple and one of Holmes' heroes, Steve Jobs, who was also famously secretive, noting that Apple is now worth two trillion dollars.
"He's trying to say that Elizabeth Holmes is following the playbook of other successful entrepreneurs," Hagan said.
"But Steve Jobs executed on his vision. Elizabeth Holmes wasn't able to. She didn't."
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