\nThe following is my understanding.<\/p>\n
\nIt seems that Charlie Javice came up with a platform, called Frank, to facilitate students’ applications for student loans. Allegedly, she claimed that Frank had around four million users in its database.<\/p>\n
\nJPMorgan Chase, after investigating the Frank platform, decided to buy it for 175 million dollars.<\/p>\n
\nIt seems that, although the platform worked, what really appealed to JPMorgan Chase was Frank’s client list: its alleged four million users. JPMorgan Chase saw them as future banking clients. In time, it was realized that Frank only ever had around 300 thousand genuine clients.<\/p>\n
\nJPMorgan Chase claimed deception based on the difference between the four million clients they’d been convinced of versus the three hundred thousand who actually existed.<\/p>\n
\nSurprising revelations seem to have precipitated from the case. An example is the concept that perhaps three hundred investment bankers spent twenty-two days studying Frank’s business before deciding to buy it. Moreover, it seems to have taken around a year to finally realize the client list amounted to only three hundred thousand rather than four million. Then, there was the idea that, compared to assets of around four trillion, 175 million doesn’t seem like much.<\/p>\n
\nMathematically speaking, my calculation suggests 175 million is 0.004375 percent of four trillion.<\/p>\n
\nThere are many directions to go with this story: I hope to be exploring some in future posts:)<\/p>\n
\nSource:<\/p>\n
Business Insider: The ‘stupidity’ of 300 investment bankers tricked by a 20-something founder is a lesson in due diligence<\/a><\/p>\n Business Insider: Charlie Javice sentenced to 7 years in prison for JPMorgan Chase fraud<\/a><\/p>\nJack of Oracle Tutoring by Jack and Diane,<\/a> Campbell River, BC.\n","protected":false},"excerpt":{"rendered":" Self-tutoring about capitalism and data: the tutor mentions a somewhat ironic case in the US. The following is my understanding. It seems that Charlie Javice came up with a platform, called Frank, to facilitate students’ applications for student loans. Allegedly, …<\/p>\n