Next Draft - Frank and Beancounters

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Wednesday, April 5, 2023

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FRANK AND BEANCOUNTERS

Charlie Javice was a celebrated tech founder who got coverage for her financial aid startup called Frank. Now she's getting a whole lot more coverage because she's facing criminal charges for financial fraud (these cases seem to be going around these days). "The DOJ and the Securities and Exchange Commission both filed lawsuits against Javice ... According to the DOJ's lawsuit, Javice 'falsely and dramatically' inflated the number of customers Frank had in order to induce JPMorgan, one of the world's biggest banks, to buy the company. Javice allegedly claimed that the startup had 4.25 million customers, but in reality, Frank had only about 300,000 clients, according to the lawsuit. Javice stood to gain more than $45 million from the fraud, the DOJ said."

What I find most intriguing about this story is that JPMorgan paid $175 million (admittedly, not a large number for a big bank) for a company that, in reality, was worth much less. Don't we follow the stock purchasing advice of analysts at banks like JPMorgan where they supposedly research companies and know more than the average investor about what to buy and sell? And yet, the bank couldn't even see the fraud of a company with books to which they had full access. Over the past few weeks, several investment advisory groups have jumped shipped from First Republic Bank. I get it. The bank is struggling and losing some big customers. But here's what I keep wondering. If you're a financial analyst making strategic decisions for deep-pocketed clients, shouldn't you have some inkling that your own company is sucking wind? If you are unaware of the headwinds facing the company to which you have the most inside access, why should clients trust you to analyze other public companies? These are the same folks who issue downgrades on regional banks after the shocking news that led to several bank runs. Uh, thanks?

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2

HERE'S TO YOUR HEALTH

"For decades, scientific studies suggested moderate drinking was better for most people's health than not drinking at all, and could even help them live longer. A new analysis of more than 40 years of research has concluded that many of those studies were flawed and that the opposite is true." Moderate drinking has no health benefits, an analysis of decades of research finds. (These health studies are enough to drive a person to drink. Next they're gonna tell you that playing quarters isn't a good way to maintain thumb and index finger strength.)

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3

IT’S ALWAYS DARKNESS BEFORE THE DON

What will be the result of the first arraignment of Donald Trump? All we know for sure is that the case (and his responses) will be endlessly, breathlessly covered 24/7, whether there's any new news or not. If this sounds familiar, it's because the same pattern led to the 2016 election and continued for four years. TNR: The Media's Coverage of Trump's Indictment Was Dumb, Desperate, and a Really Bad Sign for 2024.

+ As I explained yesterday, Donald Trump isn't the only one under arrest. You are, too. Arraign Drops Keep Falling on My Head.

+ "The defeated president of the United States incited an attack on Congress in hopes of preventing a transfer of power. Hundreds of his supporters were prosecuted and sentenced for joining a violent mob. Yet the first indictment in U.S. history of an ex-president arose from his scheme to pay two alleged sexual partners and one witness for their silence about Donald Trump's sordid personal life." I sort of had the same reaction as David Frum in The Atlantic, but as long as the big crimes are ultimately addressed, I'm not sure it really matters which case comes first. Don't Indict Trump With This.

+ There were no mug shots taken before Trump's arraignment. So people just made them up.

+ The world: "OMG!!!" New Yorkers: "Meh." For this 44-year courthouse newsstand vendor, Trump's historic arrest is just another day downtown. And, This couple accidentally got married at the site of trump's arraignment: "I did not plan for this." (Neither did the American empire...)

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4

FRAUDIAN SLIP

Since today's top section seems to focus on financial fraud and general phoniness, let's tackle the biggest fraud in US history — pandemic relief. I'm not sure it's the biggest fraud in US history (or even in the last week of US history) but the numbers are huge.

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5

EXTRA, EXTRA

Tech Exec Killed: "Bob Lee, the former chief technology officer of Square, was identified as the 43-year-old man stabbed to death in Downtown San Francisco early Tuesday morning. The news was confirmed by MobileCoin, the crypto company where Lee served as chief product officer." Lee also developed the popular Cash app. This is a terrible story. It could also turn into a loud political story, as the killing is sparking rage at ‘lawless' city of SF. (There's no doubt that San Francisco is in rough shape these days. But to keep things in perspective, "there were 12 homicides in San Francisco this year as of April 2, compared to 10 in the same year-to-date period in 2022.")

+ Gee Wis: In an election that has ramifications for abortion laws, gerrymandering, and the next presidential election, "Democrats have scored a major off-year election victory in Wisconsin, winning the state's open supreme court seat and flipping control of the court to liberals for the first time in 15 years." In Chicago, Brandon Johnson, a union organizer and former teacher, was elected as Chicago's next mayor .

+ UN-cool "Russia's U.N. ambassador on Monday dismissed U.S. and European Union descriptions of its presidency of the Security Council this month as an April Fool's joke." Russia rejects US claims its UN council presidency is a joke. (It's worse than a joke.)

+ Electoral College: "Led by the Washington-based conservative thinktank the Heritage Foundation, the groups have created an incubator of policies that would restrict access to the ballot box and amplify false claims that fraud is rampant in American elections." Dark money groups push election denialism on US state officials. (The virus has mutated and moved way beyond Trump.)

+ Dating Scam: "The arrest in Nguyen's case was a rare form of justice for the victims of a proliferating scam being used around the world, particularly in Latin America. Men are lured to meet women via dating apps, and then drugged for days at a time as their bank accounts are drained." An American Met a Woman on Tinder in Colombia. Now She's Accused of His Murder.

+ I Can't Quit You: "Journalists are put off by Musk's antics, and dunk on him daily. But those same journalists — along with a bunch of people Musk arbitrarily suspended, fired, or laid off — continue to tweet just the same, propping up the service with their quips and sports tweets and food photos just as they always have." Casey Newton: Why journalists can't quit Twitter. (I'm a recovering Twitter addict. I miss it. Journalists don't get off Twitter because they're addicted to the dopamine. There is no higher calling or deeper meaning. It's the juice. The juice pulled them in. The juice keeps them there. Hell, the juice is why Elon Musk can't stop tweeting all day even though he has like 20 jobs.)

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6

BOTTOM OF THE NEWS

"Liam Squires, a fifth-grader at HM Pearson elementary school ... recently earned a write-up on the local Fauquier Times news website after noticing that his school's Exploring Science All Around Us textbook had switched up the labels on pictures of an igneous rock and a sedimentary rock." Virginia fifth-grader's textbook correction gets hat tip from publisher. Kid's lucky he doesn't live in Florida. DeSantis would've outlawed the study of rocks.

+ Happy Passover to those who observe. This year, to really see what the kids in my house are up to, I hid the afikomen in a loaf of bread.

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Thanks,

Dave Pell
Managing Editor, Internet

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Next Draft - Frank and Beancounters

Wednesday, April 5, 2023

FRANK AND BEANCOUNTERS

HERE'S TO YOUR HEALTH

IT’S ALWAYS DARKNESS BEFORE THE DON

FRAUDIAN SLIP

EXTRA, EXTRA

BOTTOM OF THE NEWS

NextDraft
600 Harrison Street, San Francisco, CA 94107

Older messages

Arraign Drops Keep Falling on My Head

If You Smell What the Stock is Cooking

Teflon Gone

Let's Take Six

Check Yourself Before You Tech Yourself

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Next Draft - Frank and Beancounters

Wednesday, April 5, 2023

FRANK AND BEANCOUNTERS

HERE'S TO YOUR HEALTH

IT’S ALWAYS DARKNESS BEFORE THE DON

FRAUDIAN SLIP

EXTRA, EXTRA

BOTTOM OF THE NEWS

NextDraft 600 Harrison Street, San Francisco, CA 94107

Older messages

You Might Also Like

NextDraft
600 Harrison Street, San Francisco, CA 94107