My immediate reaction to when JPM found out they'd be duped after running an 'email campaign' was, hmmm, maybe well deserved, should have done your homework!
I want to put the blame solely on the executives, lawyers and team that drove the acquisition forward.
Obviously we can open the floodgates of conspiracy theories. Maybe, some from JPM team may have been on this...
One of the issues was that "she could not share her customer list due to privacy concerns". So maybe JPM could have pushed back against that more?
"""Javice also cited privacy concerns in sharing Frank’s customer data directly with JPMC. After numerous internal conversations, and in order to allay Javice’s concerns, JPMC agreed to use a third-party data management vendor, Acxiom, to validate Frank’s customer information rather than providing the personal identifying information directly to JPMC."""
The gap here was _huge_. If I was the JPM diligence team, I might have asked them for read-only access to their product analytics. They claimed something like 10K FAFSA applications/day. This should show up nicely in their analytics tools. Yes, they could fake these visits--but it would be much harder to fake that you're getting 10K visits from appropriate regions, at appropriate times of day, with appropriate dwell times, with appropriate distribution of completion rates.
Credit card processor revenue reports over prior months may have shown startingly small revenue. Match that with bank statements.
The real due diligence is their networks and reputations. If the people in charge say yes, then the paperwork will support whatever they said already.
This is a poster-child example for confirmation bias. You don't hear about all the DD that doesn't result in a fraudulent company being purchased.
But what we are uncovering is that DD is not the boss or the final decision maker.
People in power can arbitrarily choose to ignore DD.
That’s what we are seeing.