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Javice interfered in due diligence in a very sophisticated way. JPMC tried to verify user data but Javice claimed they couldn't provide user personal informatio

Javice interfered in due diligence in a very sophisticated way. JPMC tried to verify user data but Javice claimed they couldn't provide user personal information "due to privacy concerns". In the end Javice was able to convince due diligence team by engaging in multiple layers of fraud. Sure due diligence team could've done a better job, but Javice was a sophisticated adversary. It's not like due diligence team didn't have any concerns. But they wanted to balance their concerns against possibility of passing a good deal due to formality.

mbesto 4y ago
> JPMC tried to verify user data but Javice claimed they couldn't provide user personal information "due to privacy concerns". DD guy here. This is the most plausible explanation. When you're under LOI there is a lot of back and forth, which ultimately guide how the purchase agreement gets formulated. So if this was the case, then they would have made the trade off of "ok she's not letting us see the list, but we'll make sure the SPA is ironclad about this". Ultimately deals then get some money locked into escrow or RWI to soften the blow of the cost implication. At the end of the day, let's say you're JPMC and the company that you acquired did exactly what Javice did. You have an SPA that binds you legally (meaning, if they caught lying post close, they'll get sued), how on earth would you think someone was dumb enough to try to get through diligence, then operate the company post close, and NOT expect to be found committing fraud.
- symlinkk 4y ago
  [flagged]
  - deleted 4y ago
    [deleted]
  - HFguy 4y ago
    I think the author is just talking like they normally do. There is generally a lot of jargon and acronyms used here. All the time. Just that most of it is regarding programming/development, so people don't notice it. Also, even if they were spelled out, you'd still need to google the term to understand what it means. I.e., LOI and "Letter of Intent" are still just tokens that represent a concept.
  - maxbond 4y ago
    Why presume the worst instead of presuming they are acting in good faith and simply didn't think to expand their acronyms?
  - mbesto 4y ago
    Why not politely ask me what they are and maybe I'll answer. DD = due diligence LOI = letter of intent SPA = stock purchase agreement RWI = reps & warranties insurance
- jononomo 4y ago
  What is a DD guy? and what does LOI stand for?
  - styren 4y ago
    They are both pretty household terms that you could've easily Google.
    - dd82 4y ago
      for you, maybe. but not me. DD - disk destructor, double-down (a tire sidewall specification) SPA - single page application, specific purchase agreement, etc and the list goes on.
    - Incipient 4y ago
      DD was guessed within context. But the others were niche acronyms that were critical to a very insightful comment - definitely worth explaining.
  - tzs 4y ago
    In a comment you won't see unless you have "show dead" enabled, he says: DD = due diligence LOI = letter of intent SPA = stock purchase agreement RWI = reps & warranties insurance That was in answer to someone earlier asking about those acronyms, but in a rude way that got their comment flagged to death, which also hides replies. I tried vouching for it to revive it so people could see the reply with that explained the acronyms, but it did not help.
  - deltarholamda 4y ago
    Due Diligence, and Letter Of Intent.
rqtwteye 4y ago
“ Javice claimed they couldn't provide user personal information "due to privacy concerns”” That’s pretty much what Theranos did. The due diligence people walked away and threw a few hundred million more at Theranos. That’s compares to the due diligence we went through when I worked at a small startup years ago. It was only for a few million but they made us go through hell with all their information request. Seems if you want to commit fraud it’s best to go really big. The bigger you are the less scrutiny and less consequences.
- swores 4y ago
  Isn't it more likely that it's just the bigger the fraud the more likely we are to hear about it, whereas even if 50% of deals the size you went through turned out fraudulent most of them wouldn't make the news and the ones that did might still not make the front page of HN?
- fatnoah 4y ago
  > That’s compares to the due diligence we went through when I worked at a small startup years ago. It was only for a few million but they made us go through hell with all their information request. I went through this as an exec at a startup for a deal in the "few 10's of millions" range and the level of effort for the due diligence process was astounding. I'm pretty sure that by the end of the process, the acquiring company knew more about us than we did ourselves.

mbesto 4y ago

> JPMC tried to verify user data but Javice claimed they couldn't provide user personal information "due to privacy concerns". DD guy here. This is the most plausible explanation. When you're under LOI there is a lot of back and forth, which ultimately guide how the purchase agreement gets formulated. So if this was the case, then they would have made the trade off of "ok she's not letting us see the list, but we'll make sure the SPA is ironclad about this". Ultimately deals then get some money locked into escrow or RWI to soften the blow of the cost implication. At the end of the day, let's say you're JPMC and the company that you acquired did exactly what Javice did. You have an SPA that binds you legally (meaning, if they caught lying post close, they'll get sued), how on earth would you think someone was dumb enough to try to get through diligence, then operate the company post close, and NOT expect to be found committing fraud.

symlinkk 4y ago
[flagged]
- deleted 4y ago
  [deleted]
- HFguy 4y ago
  I think the author is just talking like they normally do. There is generally a lot of jargon and acronyms used here. All the time. Just that most of it is regarding programming/development, so people don't notice it. Also, even if they were spelled out, you'd still need to google the term to understand what it means. I.e., LOI and "Letter of Intent" are still just tokens that represent a concept.
- maxbond 4y ago
  Why presume the worst instead of presuming they are acting in good faith and simply didn't think to expand their acronyms?
- mbesto 4y ago
  Why not politely ask me what they are and maybe I'll answer. DD = due diligence LOI = letter of intent SPA = stock purchase agreement RWI = reps & warranties insurance
jononomo 4y ago
What is a DD guy? and what does LOI stand for?
- styren 4y ago
  They are both pretty household terms that you could've easily Google.
  - dd82 4y ago
    for you, maybe. but not me. DD - disk destructor, double-down (a tire sidewall specification) SPA - single page application, specific purchase agreement, etc and the list goes on.
  - Incipient 4y ago
    DD was guessed within context. But the others were niche acronyms that were critical to a very insightful comment - definitely worth explaining.
- tzs 4y ago
  In a comment you won't see unless you have "show dead" enabled, he says: DD = due diligence LOI = letter of intent SPA = stock purchase agreement RWI = reps & warranties insurance That was in answer to someone earlier asking about those acronyms, but in a rude way that got their comment flagged to death, which also hides replies. I tried vouching for it to revive it so people could see the reply with that explained the acronyms, but it did not help.
- deltarholamda 4y ago
  Due Diligence, and Letter Of Intent.

rqtwteye 4y ago

“ Javice claimed they couldn't provide user personal information "due to privacy concerns”” That’s pretty much what Theranos did. The due diligence people walked away and threw a few hundred million more at Theranos. That’s compares to the due diligence we went through when I worked at a small startup years ago. It was only for a few million but they made us go through hell with all their information request. Seems if you want to commit fraud it’s best to go really big. The bigger you are the less scrutiny and less consequences.

swores 4y ago
Isn't it more likely that it's just the bigger the fraud the more likely we are to hear about it, whereas even if 50% of deals the size you went through turned out fraudulent most of them wouldn't make the news and the ones that did might still not make the front page of HN?
fatnoah 4y ago
> That’s compares to the due diligence we went through when I worked at a small startup years ago. It was only for a few million but they made us go through hell with all their information request. I went through this as an exec at a startup for a deal in the "few 10's of millions" range and the level of effort for the due diligence process was astounding. I'm pretty sure that by the end of the process, the acquiring company knew more about us than we did ourselves.