JPMorgan Scammed by Startup That Lied About Its User Base
gizmodo.com
gizmodo.com
Just sad that the banks (which tend to hire the best and brightest out of the top schools) made themselves look dumb. This in particular is a bank that has over 3 trillion dollars on its books....can't be making mistakes like that, even if the total $$$ amount invested is a rounding error to them.
Couple that with the FOMO culture of 2021 and you have a recipe for minimal DD and maximum deal speed.
The bank has a fiduciary duty to it's account holders and share holders. Spending a bit more time and effort to make sure it doesn't loose money investing into a fraudulent operation is something it is legally obligated to do. Instead, the bank apparently chose to ignore red flags until the deal was already completed. As a shareholder AND account holder, I am flabbergasted that the bank just decided to piss away any money at all on such a deal.
Banks are supposed to be skeptical - that's sort of the whole point of banking. You don't just go and get a loan by asking nicely, you get a loan after the bank thoroughly investigates your work, your finances, etc...because they're on the hook to get a return on that loan.