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Third juror dismissed in trial of Theranos founder Elizabeth Holmes

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Elizabeth Holmes, founder of Theranos Inc., left, arrives at federal court in San Jose, California, on Tuesday, Oct. 12, 2021.

David Paul Morris | Bloomberg | Getty Images

SAN JOSE, CALIF. — A third juror was dismissed in Elizabeth Holmes’ criminal trial on Friday for what the judge said was “good cause.” That leaves only two alternates in a trial that’s expected to last until December.

U.S. District Court Judge Edward Davila told prosecutors and defense attorneys for Holmes that he received an email from juror No. 5 on Friday morning. The judge, along with Jeffrey Schenk, an assistant U.S. attorney, and Kevin Downey, a defense attorney for Holmes, spoke with the juror in chamber.

“The court had found good cause to excuse a juror,” Davila told the courtroom upon his return. There was no explanation given for excusing the female juror.

An alternate juror was selected to join the main bench. The impaneled jury deciding the fate of Holmes consists of eight men and four women.

“The juror raised the issue on their own, so they began to believe their ability to serve as an impartial juror was compromised,” said Danny Cevallos, an attorney and NBC News legal analyst, in an interview. “Apparently the court agreed with them,” said Cevallos, who’s been following the case but was not present in the courtroom.

Holmes’ high-profile trial began in San Jose seven weeks ago. The second juror was removed two weeks ago after revealing that, due to her Buddhist beliefs, she could not in good conscious return a verdict that may send Holmes to prison. Last month, a 19-year-old juror was dismissed for financial hardships.

Losing too many jurors runs the risk of a mistrial. However, Cevallos said that, according to a federal rule, after a jury has started deliberations a judge may permit a jury of 11 to return a verdict.

Holmes has pleaded not guilty to ten counts of wire fraud and two counts of conspiracy to commit wire fraud. Federal prosecutors allege Holmes and her co-conspirator, former company president Ramesh “Sunny” Balwani, engaged in a decade-long multimillion-dollar scheme to defraud investors and patients with regards to Theranos’ blood-testing technology.

Holmes and Balwani were indicted in 2018. Her trial has been delayed multiple times due to pandemic-related challenges and Holmes’ pregnancy. Balwani, who also pleaded not guilty, will face a separate trial next year.

Even in the case of a mistrial, Holmes would not be in the clear.

“A retrial, which the government certainly would do, would put Elizabeth’s life on hold again and drain her accounts even further,” Cevallos said. “So as much as a mistrial isn’t a conviction sometimes you’d rather get to the verdict.”

Skepticism from Pfizer

Following the juror’s departure, a scientist at Pfizer, Shane Weber, took the stand. Weber evaluated Theranos in 2008, and reviewed documents related to the blood-testing technology. He later concluded that Pfizer should not pursue a deal with the company.

In his December 2008 summary of a report, Weber recommended that “Theranos does not at this time have any diagnostic or clinical interest to Pfizer,” but he recommended the company revisit the matter every six months.

Weber’s report was shown to jurors. In it, Weber wrote, “Theranos has provided a poorly prepared summary document of their platform for home patient use with anti-angiogenic therapies.”

Further down, he wrote, “Theranos has provided non-informative, tangential, deflective or evasive answers to a written set of technical due diligence questions.”

Weber told his supervisors in an email in January 2009, that he spoke to Holmes to explain that Pfizer would not be using Theranos’ at-home products for patients.

“I was polite, clear, crisp and patiently firm as she pushed back,” the email said. “She asked for other names at Pfizer to approach and I politely deflected.”

Jurors were shown a version of a Theranos report that Holmes had sent to Walgreens executives with the Pfizer logo on it. Weber testified that Pfizer didn’t approve the use of its logo on the report.

“Would it be fair to say in 2010 or after that Pfizer endorsed Theranos technology?” Robert Leach, an assistant U.S. attorney, asked.

Weber responded, “Uh, no.”

Under cross-examination, Weber told jurors that his report on Theranos was never sent to Holmes.

‘Keep things under wraps’

Also on Friday, jurors heard from Bryan Tolbert, who made an investment in Theranos in 2006 and 2013 through Black Diamond Ventures. The firm, which was founded by by Chris Lucas, invested $5 million in the start-up.

Tolbert told jurors that there was limited information about Theranos at the time, but “it felt like a revolutionary technology and you wanted to preserve to your advantage.”

“Chris and I wanted more information, more financial information, more visibility about what was going on,” Tolbert said. “I certainly thought it was intentional they were trying to keep things under wraps.”

WATCH: Another Theranos insider testifies against founder Elizabeth Holmes

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Tesla hires former SEC trial lawyer David Misler as managing counsel

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The logo marks the showroom and service center for the US automotive and energy company Tesla in Amsterdam on October 23, 2019.

John Thys | AFP | Getty Images

Tesla has hired David Misler as a new managing counsel, according to his LinkedIn profile. Misler is a former trial attorney for the Securities and Exchange Commission and previously worked for the U.S. Department of Justice.

Tesla has repeatedly had run-ins with the SEC, most notably over statements made by CEO Elon Musk on his Twitter account where he has amassed tens of millions of followers.

In 2018, the SEC charged Musk and Tesla with securities fraud after the CEO tweeted that he was considering taking the company private at $420 per share and had funding secured in 2018. Musk later rescinded that stated plan, and Tesla and Musk settled with the regulators, paying a $20 million fine each, and signing an agreement that required the CEO to temporarily relinquish his role as chairman of the board and to have his tweets reviewed by an attorney before posting.

The original agreement was amended in 2019 when Musk continued tweeting spontaneously. The feds filed a motion to hold him in contempt, and a judge asked both parties to put on their “reasonableness pants,” and clarify what exact types of Musk’s tweets required an attorney’s review.

In June of this year, the Wall Street Journal reported the SEC had subsequently accused Musk of violating the amended agreement with tweets that said Tesla’s stock price was too high, and that discussed solar rooftop production numbers.

Legal transparency site Plainsite also published records in June revealing that the SEC had subpoenaed Elon Musk, his former chief of staff Sam Teller, his personal wealth manager Jared Birchall, his personal office Excession LLC, and the Elon Musk Revocable Trust in an unspecified and perhaps unrelated investigation.

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According to Tesla’s most recent quarterly filing, the company regularly responds to requests for “information from regulators and governmental authorities,” including the SEC and DOJ.

Tesla cautioned investors in that filing, “Should the government decide to pursue an enforcement action, there exists the possibility of a material adverse impact on our business, results of operation, prospects, cash flows and financial position.”

In a LinkedIn post announcing his move back to the private sector in late October, Misler wrote:

“Almost nine years ago, I joined the U.S. Attorney’s Office in Washington, D.C. where I took an oath that I would faithfully represent the United States as its counsel. My federal service ended this past Friday after two years in the Securities and Exchange Commission’s trial unit.” He thanked his colleagues and continued, “Today, a new journey begins. I start at Tesla as a managing counsel for litigation where I will support our important mission of accelerating the world’s transition to sustainable energy.”

Misler and Tesla did not immediately respond to requests for comment.

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White House says no Covid lockdowns as European nations implement restrictions

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Jeff Zients, White House Covid-19 coordinator, speaks during a news conference at the White House on April 13, 2021.

Leigh Vogel | Bloomberg | Getty Images

The Biden administration has no plans to curb future Covid-19 surges using a nationwide lockdown, White House coronavirus response coordinator Jeff Zients said at a briefing Monday.

Zients’ comments come as Austria enters its fourth nationwide lockdown and the Netherlands institute a partial lockdown amid a Covid surge rampaging across Europe in recent weeks. Instead of locking down the U.S., Zients said the federal government would rely on vaccines and therapeutic treatments to keep the country running in the event of another devastating Covid wave.

“We can curb the spread of the virus without having to in any way shut down our economy,” Zients said. “We have 82% of people now with one shot and more and more people getting vaccinated each week.”

Zients called for the continued use of vaccines, booster shots and monoclonal antibodies to prevent the U.S. from “going backwards in any way, shape or form.” More than 60 million eligible Americans still haven’t gotten vaccinated against Covid, and health officials are asking those who qualify for boosters to register for their extra doses with the holidays approaching.

Covid cases in the U.S. plateaued between 70,000 and 75,000 per day for almost three weeks starting in late October, but they’ve since reached a seven-day average of nearly 92,400 per day as of Sunday, an increase of 16% from the week prior, according to a CNBC analysis of data from Johns Hopkins University. But overseas, Europe tallied more than 2.1 million new cases during the week ended Nov. 14, approximately 64% of all cases globally over that span, the World Health Organization reported in its most recent weekly epidemiological update.

Austria recorded a seven-day average of nearly 14,000 daily cases as of Sunday, up 28% from a week ago, according to data compiled by Hopkins. And the Netherlands is seeing an average of about 21,000 infections per day for the week ending Sunday, 56% higher than the week prior.

Austria’s lockdown began Monday and will last for at most 20 days, with a nationwide vaccine mandate taking effect Feb. 1, Chancellor Alexander Schallenberg said Friday. The Netherlands launched a partial lockdown on Saturday as well, forcing select businesses to shut early and preventing the public from attending sporting events for three weeks, Reuters reported.

Both Austria and the Netherlands have seen protests erupt in response to the return to lockdowns and more stringent Covid mitigation measures. Similar demonstrations arose across Belgium, Croatia and Italy in recent days as well.

Outgoing German Chancellor Angela Merkel has also called for tougher measures in Europe’s largest economy as Covid spikes there.

CNBC’s Chloe Taylor, Holly Ellyatt and Nate Rattner contributed to this reporting.

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Biden picks Powell to lead U.S. Fed for a second term

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SINGAPORE — Shares in Australia rose in Tuesday morning trade, with investors in Asia-Pacific watching for market reaction after U.S. President Joe Biden announced Monday he is renominating Jerome Powell for a second term as Federal Reserve chair.

The S&P/ASX 200 in Australia rose 0.34% in morning trade, with shares of major miner BHP rising nearly 4%.

Markets in Japan are closed on Tuesday for a holiday.

Overnight stateside, the Dow Jones Industrial Average edged 17.27 points higher to 35,619.25 while the S&P 500 slipped 0.32% to 4,682.94. The Nasdaq Composite lagged, dropping 1.26% to 15,854.76.

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Those moves came as investors on Wall Street reacted to Biden picking Powell for another term as Fed chair. Biden had been under pressure to name a more progressive Democrat, rather than keep Republican Powell in the role.

Powell has guided the U.S. central bank and the country’s economy through the pandemic recession, unleashing unprecedented monetary stimulus to keep financial markets afloat. His renomination now heads to the Senate for confirmation.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.502, higher than the levels below 95.4 seen last week.

The Japanese yen traded at 114.82 per dollar, following a recent sharp weakening from below 114.5 against the greenback. The Australian dollar was at $0.7224, still off levels above $0.735 seen last week.

— CNBC’s Jeff Cox and Thomas Franck contributed to this report.

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