Live data from Hacker News

Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

cnn.com

31–40 of 366 posts

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#31

Earlier quoted context omitted.

One previous company I was CTO of got acquired by Amazon and they spent 60 days going through everything, including every line of code. I doubt a fraud of this caliber would have gone unnoticed with that kind of due diligence.

Sometimes I wonder if there is a lot of scrutiny in small things but when things get large and complex they basically give up and wave it through. I see a similar thing at my work in medical devices. In theory we have to validate all libraries we are using. So if you want to share some code you have to create a ton of documents. But when we use something like nodejs with hundreds of dependencies the whole process bas…

It's not that complex, there was nothing technical here. You could say this was 'social engineering' at some level.

She pushed back against access to the customer list claiming privacy laws as a shield. JPMorgan was overly eager and didn't want to blow up the deal by challenging her.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#32
post #22

>> A prosecutor, Micah Fergenson, though, said JPMorgan “didn’t get a functioning business” in exchange for its investment. “They acquired a crime scene.” I do not understand how an acquisition this big got thru due diligence without noticing all the fake users. Anyone in corporate M&A know if it is normal to spend this much money without inspecting the goods? Seems like the most basic of OLAP queries and two days of…

$175M isn’t that big for JPM. It’s only 0.02% of its market cap.

They also have $4.3T in AUM. $175M for them is quite literally pennies to them.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#33
> In seeking a 12-year prison sentence for Javice, prosecutors cited a 2022 text Javice sent to a colleague in which she called it “ridiculous” that Holmes got over 11 years in prison.

This seems utterly irrelevant to the sentencing, but what do I know.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#34

>> A prosecutor, Micah Fergenson, though, said JPMorgan “didn’t get a functioning business” in exchange for its investment. “They acquired a crime scene.” I do not understand how an acquisition this big got thru due diligence without noticing all the fake users. Anyone in corporate M&A know if it is normal to spend this much money without inspecting the goods? Seems like the most basic of OLAP queries and two days of…

> Seems like the most basic of OLAP queries and two days of effort would reveal very suspicious userbase. What would those queries look like?

[deleted]

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#36

> In seeking a 12-year prison sentence for Javice, prosecutors cited a 2022 text Javice sent to a colleague in which she called it “ridiculous” that Holmes got over 11 years in prison. This seems utterly irrelevant to the sentencing, but what do I know.

Goes to remorse.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#37

Earlier quoted context omitted.

What are you thinking the crime would be? He bet his company on a literal toss of the dice instead of the routine figurative ones. Outside of Bribery and ?SarBox? (Whichever regulation handles kickbacks, etc), I can't think of anything.

If you spend investor money at a literal casino while advertising a non-casino related business, and pay the investors back, probably people will view you as not committing a crime. If you get investor money or get a loan on the basis of funding logistics investments, bet it on roulette red, and go bankrupt, I would expect you'd be looking at hard jail time for fraud. So I'm thinking the crime would be nothing, becau…

There are lots of examples of people going to jail despite investors getting their money back, like SBF and Shkreli. Even Madoff investors got 94% of their investments back.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#38

At an investor event, a desperate journalist was running around the room asking people their age. He ended up at our table, with a drink in hand, and a defeated look on his face. He had given up. We talked a bit, and he asked me, "are you under 30?" I answered "No. But this guy is." I pointed at the 28 year old cofounder of the start up I was part off. Before the evening was over, my colleague made it to the list of…

Do you know the journalist's name? I'd love to be part of Forbes' 10 billion under 10 billion.

The Onion had a listicle entitled "80 Under 80 -- and five 79-year-olds to watch out for." Once again they nailed the inherent vacuousness of modern news.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#39

Earlier quoted context omitted.

> (unless you're Shkreli, don't think his investors lost money, but he pissed off some politicians because he said the quiet parts out loud about how the pharma industry works) What's the TL;DR? His wikipedia page doesn't make it obvious.

Shkreli's schtick was to buy out or control pharma companies that had a monopoly and jack the everliving fuck out of the prices. He had some programs for uninsured people, but he would milk the insurance companies absolutely dry, which gave him some wild profits. This made a bunch of powerful people absolutely enraged, as he was basically publicly bragging about jacking the ever living fuck out of the prices. Pharma…

Sounds like basically the big boy version of how all the other psychiatrists who run plausibly deniable pill mills will screech about the one running a flagrant pill mill until they lose their license.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#40

>> A prosecutor, Micah Fergenson, though, said JPMorgan “didn’t get a functioning business” in exchange for its investment. “They acquired a crime scene.” I do not understand how an acquisition this big got thru due diligence without noticing all the fake users. Anyone in corporate M&A know if it is normal to spend this much money without inspecting the goods? Seems like the most basic of OLAP queries and two days of…

> Seems like the most basic of OLAP queries and two days of effort would reveal very suspicious userbase. What would those queries look like?

SELECT COUNT(*) FROM users would have been a start from the sound of it.
Post reply on HN