JP Morgan paid $175M for Frank, a FinTech Business That Had Only 1/10 of its Claimed Customer Base. It fired the founder – and then sued her.
You have likely read the headlines and heard the news reports. You may have read a couple stories explaining in detail WHAT happened and HOW it happened. Charlie Javice, a young name-dropping entrepreneur with some buzz and well-known investors sold her company to JP Morgan Chase (“JPMC”) for $175M. The huge bank subsequently discovers it didn’t get what it paid for (intentionally scammed, to paraphrase JPMC’s lawyers) and sues her.
Wow. Between Charlie Javice, Sam Bankman Fried, Elizabeth Holmes and other young criminals, Fortune’s “40 under 40” is becoming something of a police blotter. At this rate, American Greed is probably good for another 10 seasons on CNBC.
But I digress.
The looming question is: WHY didn’t JPMC catch it? JPM isn’t pointing fingers at any of its team, at least not in public, and their PR/legal team is not saying more than is necessary. This is not surprising to me given (A) the level of corporate embarrassment, =large, and (B) that a $175M line item, a mere half-of-one-percent of JPM’s $34B top-line in Q4, actually interrupted Jamie Dimon’s earnings call as curious and shocked analysts asked, So, what the hell is up with this Frank acquisition? (yep, that happened).
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