JP Morgan sues online college financial aid start-up founder etc for allegedly faking customer lists
Oh, darn. The big company that wanted to capitalize off a completely unnecessary service - students don’t need this kind of “help” to file for federal aid when high schools & colleges can provide it to them - in order to get names of financially naive young people to whom they could push loans & credit cards got hoodwinked. I’m not losing sleep over this one.
Here’s a detailed follow-up story to this:
It was a pitch designed to make a greedy company salivate over the idea of getting a list of students so naive that they would turn to a for-profit company to get “help” completing a FAFSA. If JPM really wanted to help students, they could have donated money to the college access organizations that work to help students.
Just saw this. Some heads need to roll at JP Morgan. Good luck getting your investment back!
Play evil games—get poor prizes!
I disagree with all of you. This is another Elizabeth Holmes/Theranos fraud. The company made up out of whole cloth their entire client list. JPM bought this in good faith. There’s nothing wrong with buying a list in order to promote other products – I’d hardly call that “greedy.”
What worries me is that now at least two people – both women, at that – have made up fraudulent results in order to get rich fast. How many others are out there?
Yes fraud. But JPM conducted a completely inadequate due diligence process, I have zero sympathy for them.
Separately if there was a way to make money from helping limited income families navigate FA, that business would already exist. It’s tough to monetize a service geared towards families who have limited incomes, that’s why most of these services are in the non-profit world.
That’s what private equity does. Research if a business is worth buying.
Someone at JPM made a big mistake and I suspect some poor junior associate took the fall, if they weren’t already gone.
FOMO drives inadequate, rushed due diligence. I don’t feel sorry for either party here. The founders were crooks, and JPM was stupid. Unlike Theranos where the majority of the early investors were individuals, this is a financial powerhouse we are talking about. Sadly, as deb said, an associate or two will be tarred and featured, but the partners will keep their bucks.