Elizabeth Holmes Will Use a Puffery Defense. Could It Work?
The disgraced Theranos CEO is hoping Silicon Valley’s reputation for making exaggerated claims lets her get away with fraud.
Just puffing.
Photographer: Lisa Lake/Getty ImagesIn a filing this week, lawyers for Elizabeth Holmes, former CEO of Theranos, made clear that their client plans to defend herself against federal fraud charges in part by arguing that everyone in Silicon Valley understands that start-ups make exaggerated claims. They asked the judge presiding over her forthcoming trial to allow the defense to argue to the jury that her alleged misstatements to investors were merely what the law calls puffery.
There’s a certain logic here. In common usage, puffery refers to an extravagant claim, a usage that the Oxford English Dictionary traces to the early 18th century. In the legal context, a statement that is mere puffery isn’t intended to be taken literally, and is understood by the hearer as an exaggeration, mere boosterism.