Financial giant JP Morgan Chase is in the spotlight because it is suspected of being a victim of fraud by a startup that they bought for USD 175 million. The CEO of JP Morgan also spoke about the case.
As reported, JP Morgan filed a lawsuit against young businessman Charlie Javice. JP Morgan bought a startup made by Javice named Frank for USD 175 million, but it is said that millions of users were faked by Javice.
As quoted by us from Forbes, Monday (16/1/2023) CEO of HP Morgan Jamie Dimon admits that they made a mistake in the acquisition of a startup named Frank. JP Morgan accused Javice of falsifying 4 million fake startup users.
Frank claimed to have about 4,265,000 customer accounts, in fact the number was less than 300,000, It was discovered that when JP Morgan tried to email the user, 70% of the emails bounced back.
Dimon defended himself that while buying Frank was a blunder, the largest bank in the United States needed to take risks in terms of finding potential companies to buy from.
"Obviously when you try 300 times a year you're going to make a mistake and we don't want our company to be afraid of mistakes and do nothing," he said.
Of course the question arises how can a bank like JP Morgan be deceived even though it has done due diligence or examined Frank's ins and outs. Dimon defended himself that a thorough examination had been carried out.
"We are very disciplined and you can see it in different things, from the success of our investments, the quality of our products and services, as well as acquisitions. I will teach lessons later after this problem is over," said the big boss JP Morgan.