The Blubber

Per Barrons

JPMorgan Chase just purchased a website for $175 million on the pretense that it was doing well but now, the company is shutting it down after most of its users were reportedly false.

The news comes at a time when $18 trillion worth of global stock was wiped out in 2022. With more caution on its investments, JPMorgan Chase made an error that its CEO, Jamie Dimon, says is part of the business.

Dimon: “When you’re getting up to bat 300 times a year you are going to have errors"

The website was initially bought with the notion that it had millions of students using the service. This, however, turned out to be false, resulting in the CEO of JPMorgan Chase calling this "a huge mistake."

Franks, the website purchased, is a college financial-aid website that Charlie Javice founded. The complaint by JPMorgan Chase is that the CEO intentionally tried to hide the real numbers when they were doing their due diligence.

The complaint notes that Javice worked with a data-science professor to try and fabricate millions of students. By generating these millions of fake students, the founder could back up its user base claims of having millions of students using the website.

JPMorgan Chase detailed in its complaint how the website actually had potential but its founder chose to lie. It was noted that Javice lied about the success, size, and depth of market penetration that Frank could accomplish.

Frank "...seemingly had the potential to grow and become a successful enterprise in the future, and appeared to have had early proven success... But to cash in, Javice decided to lie, including lying about Frank’s success, Frank’s size, and the depth of Frank’s market penetration.”

Javice has also filed a lawsuit against JPMorgan, per CNBC, alleging that they made up reasons to get her fired and avoid paying her. She said that she still owned millions of dollars and that the company should pay her legal bills.

Aside from students, the news comes at a time when banks like Wells Fargo is trying to offer 'less complex' business for minority communities and others.

See flow at unusualwhales.com/flow.

Other News:

• Global stock wipeout at $18 trillion
• Wells Fargo Plans to Offer 'Less Complex' Business for Minority Communities and More

Resources:

Barrons

CNBC