JPMorgan Chase burned! Buys college financial aid platform for a fortune then learns most users were fake

When billionaire Elon Musk initially balked at buying Twitter after making a $44 billion bid on the platform last spring because he was concerned that an inordinate amount of users were fake, he was on to something.

In September, for instance, according to an analysis by leading cyber security specialist Dan Woods, who formerly worked for the FBI and CIA, he concluded that as many as 80 percent of Twitter accounts are bots, The Australian reported.

“Sure sounds higher than 5%!” Musk wrote on the platform in response to Woods’ findings, a reference to what he was told by the former Twitter management team as the sale of the platform was taking place.

Sure sounds higher than 5%!
https://t.co/Va7TxxzoI6

— Elon Musk (@elonmusk) September 1, 2022

“More than 80 percent of Twitter accounts are likely bots, according to former CIA and FBI cyber security specialist Dan Woods, who created a fake profile and quickly gained more than 100,000 fake followers in one weekend by purchasing them on the dark web,” the outlet reported.

“Mr Woods, who studies bot traffic as part of his current role with global cyber security provider F5, told The Australian that Twitter’s bot traffic was almost certainly far greater than it has expressed publicly and greater than it believes internally,” the outlet continued.

The point is the platform had a lot more fake accounts than perhaps even the old Twitter management team realized — or was willing to admit.

Now, another company has learned the hard, expensive way that online platforms today are mostly inhabited by trolls, bots, and deep state actors seeking to manipulate, control, or spread propaganda.

The Wall Street Journal reported:

Chase & Co. is suing the leaders of Frank, a financial-aid business it bought for $175 million in 2021, alleging they duped the bank by making up millions of fake student accounts to show it had a growing business. 

The bank filed a lawsuit late last month in a Delaware federal court against Frank executives Charlie Javice and Olivier Amar, alleging widespread fraud at a company that is marketed as helping families navigate the complex college financial-aid process. Frank offered a tool to simplify federal financial-aid forms, as well as listings of scholarships and low-cost college courses. 

In the summer of 2021, Ms. Javice approached the financial giant about potentially acquiring it, the lawsuit states. At the time, she claimed the platform had some 4.25 million users, according to the bank, but in reality, the platform had fewer than 300,000 actual users, says the lawsuit, or a fraction — 10 percent — of what JPMorgan was told.

“Rather than reveal the truth, Javice first pushed back on [JPMorgan’s] request, arguing that she could not share her customer list due to privacy concerns,” the bank noted in its court filing. “After [JPMorgan] insisted, Javice chose to invent several million Frank customer accounts out of whole cloth.”

Arrogantly, Javice filed a separate lawsuit against the bank in Delaware state court just days before she was sued, claiming that she’s owed millions of dollars for money she laid out while she had to defend herself against a wave of internal investigations that started in the spring of 2022. The suit states she was fired from the bank in November.

She called the investigations “groundless” and said the bank “manufactured a for-cause termination in bad faith.” She also insisted that JPMorgan Chase was refusing to pay her some $28 million she claims she is owed.

Alex Spiro, an attorney for Javice, described the bank’s lawsuit as “nothing but a cover.”

“After JPM rushed to acquire Charlie’s rocketship business, JPM realized they couldn’t work around existing student privacy laws, committed misconduct and then tried to retrade the deal. Charlie blew the whistle and then sued,” he noted.

The fact is, the vast majority of ‘users’ on nearly all social media and online platforms are fake. It’s not a real world, and this case proves that point once again.

Sources include:

WSJ.com

TheAustralian.com.au