SAN JOSE, Calif.—Theranos Inc. founder Elizabeth Holmes conceded Tuesday that she has many regrets about how she responded to criticisms of her blood-testing company, as prosecutors questioned her directly for the first time since they charged her with criminal fraud more than three years ago.

The cross-examination by Assistant U.S. Attorney Robert Leach marked a pivotal moment in Ms. Holmes’s monthslong trial, allowing the government to try to pick apart the narrative she has given to jurors during her time on the stand as a dedicated entrepreneur who tried to make her company succeed.

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