Target $70
Tuesday, April 4, 2023
Millennial CEO Accused Of Tricking JPMorgan Into $175 Million Purchase Charged With Fraud
The 30-year-old founder of a college financial planning website accused of fabricating nearly 4 million user accounts before selling it to JPMorgan for $175 million has been charged with fraud.
Founded in 2016 by CEO Charlie Javice, the company, 'Frank,' offered software to help young Americans obtain financial aid in what Javice framed as "an Amazon for higher education," and had the backing of billionaire Marc Rowan - the company's lead investor. JPMorgan touted the Sept. 2021 deal as giving it the "fastest-growing college financial planning platform" used by over 5 million students at 6,000 institutions.
The 31-year-old Javice was charged by Manhattan federal prosecutors on Tuesday with one count of conspiracy to commit bank and wire fraud, one count of wire fraud, one count of wire fraud affecting a financial institution, and one count of bank fraud according to Bloomberg.
"As alleged, Javice engaged in a brazen scheme to defraud JPMC in the course of a $175 million acquisition deal. She lied directly to JPMC and fabricated data to support those lies—all in order to make over $45 million from the sale of her company," said US Attorney Damian Williams in a Tuesday statement. "This arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them, and this Office will hold them accountable for putting their greed above the law."
Javice says the bank rushed to buy Frank without doing proper due diligence, and was attempting to deflect attention from its violations of student privacy laws. She has countersued the bank in Delaware state court to force JPMorgan to cover her legal fees.
Javice said in a response to JPMorgan’s suit that that Chief Executive Officer Jamie Dimon pushed to acquire Frank out of fear that another bank was eyeing the company, that she was being scapegoated for the bank’s faulty due diligence and that it was JPMorgan that asked her to come up with “synthetic data” on Frank users. -Bloomberg
According to JPMorgan, however, the bank discovered the fabricated accounts after sending out emails to a batch of 400,000 Frank customers - with around 70% of them bouncing back, according to according to a lawsuit filed in December in US District Court in Delaware, CNBC reported in January.
The bank's lawsuit claims that Javice pitched the bank on the "lie" that over 4 million users had signed up to use Frank to apply for federal aid. When the bank asked for proof during due diligence, Javice allegedly fabricated an enormous list of "fake customers – a list of names, addresses, dates of birth, and other personal information for 4.265 million ‘students’ who did not actually exist."
In reality, Frank had less than 300,000 customer accounts at the time, according to the lawsuit.
Sanara: 510(k) Clearance for BIASURGE™ Advanced Surgical Solution
Sanara MedTech Inc. Based in Fort Worth, Texas, Sanara MedTech Inc. (“Sanara,” the “Company,” “we,” “our” or “us”) (NASDAQ: SMTI), a medical technology company focused on developing and commercializing transformative technologies to improve clinical outcomes and reduce healthcare expenditures in the surgical, chronic wound and skincare markets, announced today that it has received 510(k) clearance for BIASURGE™ Advanced Surgical Solution (“BIASURGE™").
https://finance.yahoo.com/news/sanara-medtech-inc-announces-510-131500020.html
Banking Crisis "Is Not Over Yet" - Dimon Warns Of "Repurcussions For Years To Come"
Having correctly forecasted the "unprecedented" risks from the combination of inflation, war, and COVID in last year's letter, JPMorgan CEO Jamie Dimon offers only a very dim silver lining for the way forward (current consumer strength and AI opportunities) while warning that the banking crisis is "not over yet", fearing an "overreaction" by regulators,
“As I write this letter, the current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come. But importantly, recent events are nothing like what occurred during the 2008 global financial crisis."
Dimon is quick to point the finger of blame at the regulators...
“Ironically, banks were incented to own very safe government securities because they were considered highly liquid by regulators and carried very low capital requirements,” Dimon said.
“Even worse,” he added, the Federal Reserve didn’t stress-test banks on what would happen as rates jumped.
Though he admits management are not without blame....
“This is not to absolve bank management – it’s just to make clear that this wasn’t the finest hour for many players,” he said.
“All of these colliding factors became critically important when the marketplace, rating agencies and depositors focused on them.”
The CEO is the nation's largest bank warns of damage to 'trust' in the banking system:
“Any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis. While it is true that this bank crisis ‘benefited’ larger banks due to the inflow of deposits they received from smaller institutions, the notion that this meltdown was good for them in any way is absurd,” Dimon wrote.
Dimon also cautioned against knee-jerk changes to the regulatory system.
Dimon said that regulation should be “less academic, more collaborative” and that policymakers should be more wary of potentially pushing some financial services to nonbanks and so-called shadow banks.
He wrote that most of the risks, including the potential losses from held-to-maturity bonds, were “hiding in plain sight.”
“The recent failures of Silicon Valley Bank (SVB) in the United States and Credit Suisse in Europe, and the related stress in the banking system, underscore that simply satisfying regulatory requirements is not sufficient. Risks are abundant, and managing those risks requires constant and vigilant scrutiny as the world evolves,” Dimon wrote.
Dimon then offered an upbeat tone, adjusting from "hurricane" threats for the economy to hoping that "storm clouds peacefully and painlessly dissipate" suggesting that "businesses are pretty healthy and credit losses are extremely low," making careful use of the present tense:
"...as of April 1, 2023, spending has been consistently running higher versus the prior year.."
Consumer "balance sheets are in great shape as they still have, according to our own analysis, $1.2 trillion more “excess cash” in their checking accounts than before the pandemic (credit card debt is simply normalizing)."
The JPMorgan CEO then departed his usual beat of finance and addressed climate change and AI.
Going 'green' is going to need more government spending, according to Dimon (raising permitting reform and eminent domain as two areas to consider):
“We simply are not getting the adequate investments fast enough for grid, solar, wind and pipeline initiatives,” he said, urging authorities to make it easier to get permits.
To expedite progress, governments, businesses and non-governmental organizations need to align across a series of practical policy changes that comprehensively address fundamental issues that are holding us back,” Dimon wrote.
“The window for action to avert the costliest impacts of global climate change is closing.”
Artificial intelligence is “extraordinary” and will be crucial to JPMorgan’s future:
“We take the responsible use of AI very seriously and have an interdisciplinary team of ethicists helping us prevent unintended misuse, anticipate regulation, and promote trust with our clients, customers and communities,” the CEO wrote.
While AI can be helpful in areas such as marketing and spotting risks, it’s essential for heading off fraud and defending against attacks on the bank and markets, Dimon said.
“Because you can be certain that the bad guys will be using it, too,” he said.
Dimon weighs in on geopolitics:
"War complicates geopolitics and materially adds risks.
...
The tensions of this war are also leading to the rethinking of many economic alliances, as well as trade and national security. All these factors create more risk and potentially higher inflation, and their confluence (along with inflation and QT) creates a somewhat unpredictable and dangerous outcome."
The billionaire banker concludes that the current uncertainty "may be a once-in-a-generation sea change, with material effect."
"Of course, there is always uncertainty. I am often frustrated when people talk about today’s uncertainty as if it were any different from yesterday's uncertainty. However, in this case, I believe it actually is.
Less-predictable geopolitics, in general, and a complex adjustment to relationships with China are probably leading to higher military spending and a realignment of global economic and military alliances.
Higher fiscal spending, higher debt to gross domestic product (GDP), higher investment spend in general (including climate spending), higher energy costs and the inflationary effect of trade adjustments all lead me to believe that we may have gone from a savings glut to scarce capital and may be headed to higher inflation and higher interest rates than in the immediate past.
Essentially, we may be moving, as I read somewhere, from a virtuous cycle to a vicious cycle."
And finally, Dimon makes it clear where he stands:
“lest anyone think that I’ve become a little soft, rest assured your CEO is a red-blooded, patriotic, free-enterprise and free-market capitalist.”
The headline remains clear:
"potential trouble brewing from unprecedented fiscal spending, quantitative tightening, and geopolitical tensions."
Read all 32 pages of the JPMorgan CEO's letter below:
Trump Attorney Announces Plans To File Motions To Dismiss, Alleging Prosecutorial Misconduct
by Gary Bai via The Epoch Times,
Joseph Tacopina, a lawyer defending former president Donald Trump in Manhattan District Attorney Alvin Bragg’s hush money case, announced late Monday his plans to file “a host of” motions to dismiss, including one based on prosecutorial misconduct and selective prosecution.”
“There will be a host of motions we’re going to make, including … a motion to dismiss based on selective prosecution and prosecutorial misconduct,” Tacopina told Fox News’s Hannity program late Monday, adding that the defense team will consider other motions after seeing the indictment, such as a venue change or statute of limitations considerations.
Trump’s arraignment hearing is set to begin at 2:15 p.m. ET on Tuesday, April 4, Lucian Chalfen, director of Public Information for the New York Court System, told The Epoch Times in a statement. Charges are expected to be revealed during this indictment.
The announcement revealed the first move made by Trump’s defense attorney in a historic case where a former president faces criminal charges. Though the exact charges are under seal, Bragg’s criminal case appears to be centered on whether Trump made a $130,000 payment to Stormy Daniels and documented the payment as false business records—thereby committing a state offense—to cover up or commit violations of federal campaign finance laws.
Legal experts have been skeptical of Bragg’s indictment, combining federal and state laws to bring forward felony charges.
“Of course, that is why it is selective prosecution. Again, if the was not named Donald Trump, there would be no indictment. That’s a fact … There would not be a case if this wasn’t Donald Trump,” the attorney told Hannity when asked to elaborate on his reasons for filing a motion to dismiss based on these grounds.
“And so that’s where you … we’re really gone amok here. You select the person you don’t like, Donald Trump, and you try to find a crime. So it is mind-boggling to me that we’re here. We are here. But it’s just not going to hold up,” Tacopina added.
That was shared by Harvard Law School professor emeritus Alan Dershowitz, who said that Bragg is stretching the law to get Trump.
“They’re searching for crimes to get him. They’re just rummaging through the law books and doing everything they can to get him, but I don’t think they’ve succeeded,” he told The Epoch Times in an interview earlier in March.
“It’s not a righteous prosecution. It’s not a just prosecution. And I think every libertarian, whether you’re conservative or liberal, should be opposed to it,” he said.
“I can’t imagine that an appellate court would ever hold this, but I don’t think Bragg cares about this. He wants the publicity of a perp walk and an arrest.”
In the interview with Hannity on Monday, Tacopina gave hints of the facets of the case that Trump’s defense team will challenge, including an attempt to convince the Manhattan-based jury that the trial should not be based on politics, but is about blind justice and a man’s life.
In a previous interview, Tacopina told The Epoch Times that he filed a formal ethics complaint earlier in March (pdf) alleging that Bragg violated prosecutorial conduct by pursuing a case with a clear personal and political animus against Trump. That complaint was filed with the New York City Department of Investigation (DOI), the city government’s watchdog. The scope of the DOI’s investigations includes misconduct, waste, fraud, abuse of authority, and unethical conduct, and its investigations are confidential.
“The Department of Investigation is looking into Mr. Bragg,” Tacopina said in an interview on March 22.
In his complaint to DOI Commissioner Jocelyn Strauber, Tacopina called for the DOI to investigate allegations of prosecutorial misconduct of current and former lead prosecutors of the New York district attorney’s office, who he said had a “personal and political animus” against Trump that motivated their decision to begin investigating the former president.
He named Bragg, former District Attorney Cyrus Vance, former New York District Attorney’s Office General Counsel Carey Dunne, and former Special Assistant District Attorney Mark Pomerantz, who have at some point been involved in investigating Trump.
“Plainly, their own actions and/or words establish that Cyrus Vance, Carey Dunne, and Mark Pomerantz picked a person they hated for political reasons and targeted him for prosecution to harm his ability to run for national office,” Tacopina wrote in the letter.
As an example of this alleged animus toward Trump, Tacopina cited Pomerantz’s account in his book “People vs. Donald Trump: An Inside Account.”
“I saw him as a malignant narcissist, and perhaps a megalomaniac who posed a real danger to the country and to the ideas that mattered to me,” the book reads.
“His behavior made me angry, sad, and even disgusted.”
In the letter, Tacopina also alleged that the prosecutors’ animus had been obvious considering that the investigation of Trump was based on novel legal theories, their repeated dismissal of the concerns of experienced senior prosecutors, and their resurrection of Daniels’s case—which he called a “zombie case”—despite it previously having been thrown out for lack of merit.
The Manhattan District Attorney’s office didn’t respond by press time to a request by The Epoch Times for comment.
Fed's Making Worst "Policy Mistake In Several Decades", El-Erian Warns
by Andrew Moran via The Epoch Times,
The Federal Reserve’s year-long aggressive monetary tightening efforts could turn out to be one of the most significant policy errors in the last several decades, according to renowned economist Mohamed El-Erian.
El-Erian shared excerpts from the Peterson Institute for International Economics (PIIE) and the Financial Times that reinforced his view that the U.S. central bank is committing egregious policy missteps.
“As first mentioned almost a year ago, I fear that this may well end up being the biggest Fed policy mistake in several decades,” the chief economic adviser at Allianz tweeted on Monday.
The PIIE lamented on the Fed’s macroeconomic scenarios to determine the 2023 stress tests on large banks. The think tank noted that the measurements were not diverse enough and failed to address the potential effects of higher interest rates on financial institutions.
Silicon Valley Bank was not subjected to routine stress tests. However, experts aver that the California-based bank would have passed because it had been considered “well-capitalized” by the Fed. The tests also gauged how the company would have handled a falling GDP, rising unemployment, and tighter credit conditions. Today’s primary economic challenges are rampant price inflation and higher interest rates.
The Financial Times article contained comments from Julius Baer CEO Philipp Rickenbacher that acknowledged the possibility of “some room for policy mistakes at the highest levels when it comes to interest rates.”
‘One Mistake After Another’
El-Erian has been highly critical of the Federal Reserve for the past year.
He penned an op-ed on MarketWatch on Monday, asserting that the institution “has slipped in its analysis, forecasts, policymaking and communication” and has made “one mistake after another.”
“The Fed’s problems should worry everyone. A loss of credibility directly affects its ability to maintain financial stability and guide markets in a manner consistent with its dual mandate of maintaining price stability and supporting maximum employment,” he wrote.
In the end, Fed Chair Jerome Powell will be remembered as Paul Volcker or Arthur Burns, El-Erian purported. The former had conquered skyrocketing inflation in the 1980s. The latter kept monetary policy too loose for too long, resulting in stagflation (a blend of slow economic growth and rampant inflation).
Federal Reserve Chair Jerome Powell as he testifies before the House Committee on Financial Services on Capitol Hill in Washington on March 8, 2023. (Anna Moneymaker/Getty Images)
In October, he told CBS’ “Face the Nation” that the central bank made two crucial errors: mischaracterizing inflation as transitory and failing to respond to high inflation “in a meaningful way.”
“So yes, unfortunately, this will go down in a big policy error by the Federal Reserve,” he said.
“Even Chair Powell has gone from looking for a soft landing to soft-ish landing to now talking about pain. And that is the problem. That is the cost of a Federal Reserve being late. Not only does it have to overcome inflation, but it has to restore its credibility.”
Last month, El-Erian asserted that the Fed is facing a “trilemma”: inflation, financial stability, and economic growth.
He suggested that the Fed should hit the pause button on its tightening campaign, adding that he is concerned about how the banking turmoil could result in credit challenges throughout the national economy.
“I’m more worried about the credit issues — and that really comes back to how badly hampered the economy is because of this mishandled interest rate cycle,” El-Erian told CNBC.
At the March Federal Open Market Committee (FOMC) policy meeting, the central bank voted to raise the benchmark fed funds rate by 25 basis points to a target range of 4.75 percent and 5.00 percent.
The updated Survey of Economic Projections (SEP) (pdf) kept the 2023 median rate at 5.1 percent, suggesting monetary policymakers expect one more rate hike this year.
Powell told reporters he does not anticipate any rate cuts this year, adding that the rate-setting committee could even pull the trigger on a rate hike if necessary.
He also insisted that the American people can feel confident that their deposits are safe in the wake of the SVB and Signature Bank failures.
“We took powerful actions with Treasury and the FDIC, which demonstrate that all depositors’ savings are safe,” Powell told a post-FOMC meeting press conference. “The banking system is safe.”
Powell noted that it is too early to determine if the SVB and Signature failures will impact the U.S. economy.
Security guards and FDIC representatives open a Silicon Valley Bank (SVB) branch for customers at SVBs headquarters in Santa Clara, Calif., on March 13, 2023. (Noah Berger/AFP via Getty Images)
Some March economic data were published on Monday.
The Institute for Supply Management’s (ISM) Manufacturing Purchasing Managers’ Index (PMI) weakened to 46.3 last month, down from 47.7 in February and below the market forecast of 47.5. The S&P Global Manufacturing PMI contracted for the fifth straight month, coming in at 49.20, up from 47.3.
“Weak demand for inputs resulted in some relief for manufacturers as input cost inflation slowed again. A paucity of new orders sparked efforts to entice customers, however, as selling price inflation eased notably to the weakest since October 2020,” wrote Siân Jones, Senior Economist at S&P Global Market Intelligence, in the report. “Nonetheless, inflationary concerns weighed on business confidence once again amid pressure on margins.”
https://www.zerohedge.com/markets/feds-making-worst-policy-mistake-several-decades-el-erian-warns
Arbutus files patent infringement lawsuit against Pfizer/BioNTech over COVID shots
Arbutus Biopharma on Tuesday sued U.S. drugmaker Pfizer Inc and its German partner BioNTech SE in a New Jersey district court, claiming their mRNA COVID-19 vaccines infringe five of Arbutus' patents.
Arbutus, along with its licensee Genevant Sciences, is seeking damages, including reasonable royalties, over the use of lipid nanoparticle (LNP) delivery technology in Pfizer/BioNTech vaccines to carry and deliver genetic material into the body.
The lawsuit by Arbutus and Genevant says Pfizer/BioNTech engaged in licensing discussions for the technology but they did not "result in a settlement".
Genevant is a joint venture between Arbutus and Roivant Sciences Ltd.
Arbutus Biopharma had also sued Moderna Inc in the Delaware federal court last year, claiming the latter's mRNA COVID-19 vaccine also infringes its patents.
In their lawsuit against Moderna, Arbutus had said they were not looking to block the drugmaker from producing or distributing the vaccines but were seeking money damages including a reasonable royalty.
Pfizer said it has not yet received the complaint.
"However, we remain confident in our intellectual property supporting the Pfizer/BioNTech vaccine and will vigorously defend against the allegations of the lawsuit," Pfizer said in an e-mailed statement to Reuters.
BioNTech did not immediately respond to a Reuters request for comment on the lawsuit. Genevant and Arbutus also did not immediately respond to requests for comment.
Moderna had sued Pfizer and BioNTech in August 2022 for allegedly infringing three patents related to their multibillion-dollar mRNA COVID-19 vaccines.
Pfizer and BioNtech are facing another patent infringement lawsuit related to their COVID-19 vaccines brought by Alnylam Pharmaceuticals Inc in March 2022.
Arbutus rose marginally in volatile trading before the bell while Pfizer and U.S.-listed shares of BioNtech were up around 0.2% each.
https://finance.yahoo.com/news/1-arbutus-files-patent-infringement-122249006.html
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