Morning Brew Daily
Another Forbes '30 Under 30' Heads to Trial & DOGE Wants Access to the IRS
Tue, 18 Feb 2025
Episode 521: Toby and Neal have the latest on another Forbes '30 Under 30' recipient, Charlie Javice, heading to trial over her startup company's feud with JPMorgan. Then, DOGE wants access to valuable IRS data and the President of Argentina, Javier Milei is under fire for his promotion of a cryptocurrency that ended up crashing. Next up the guys share their winners of the long weekend which include European defense stocks and the 4-Nations Face-Off. Then finally, a look at the week ahead. LinkedIn will give you a $100 credit on your next campaign so you can try it yourself. Go to LinkedIn.com/MBD Terms and conditions apply. Only on LinkedIn ads. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Check out https://linkedin.com/MBD for more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Shark Attacks 03:15 - Forbes 30 Under 30 Trial 07:45 - DOGE Wants in on the IRS 11:15 - Argentina Crypto Downfall 16:00 - Winners of the Long Weekend 22:40 - Week Ahead Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the recent updates on shark attacks worldwide?
Welcome back to the short week. Hope you had a relaxing weekend. Look, there are a lot of things to worry about in this world, but maybe getting attacked by a shark is not one of them. According to a new report from the Florida Museum of Natural History, 2024 was a quote, exceptionally calm year for shark bites.
There were only 47 unprovoked attacks around the world last year, down 22 from the previous year and far below the 10 year average of 70. Toby, I think it's time. I'm ready to watch Jaws again.
My question here, though, is where are these attacks taking place? Because there still were attacks worldwide. Last year, there were 28 confirmed bites in the United States. That accounted for 60% of the worldwide total. And half of those attacks took place in my home state of Florida. Florida had a total of 14 bites. And of those, eight occurred in Volusia County, which is on the East Coast.
It's that Daytona Beach area. It's known as the shark attack capital of the world. So even though bites were down, there still were a few off the coast of Florida. All this being said, less instances of people being shark bait hoo-ha-ha worldwide, and that's a good thing. Now a word from our sponsor, LinkedIn Ads. Hope you all listening had a wonderful Valentine's Day.
Neil, I was out to dinner on Friday and saw this couple eating, and you could just tell it wasn't going anywhere. That's painful. Get all dressed up, go out to eat. But if the spark isn't there, what's the point? If you aren't right for each other, going on a Valentine's date is just a waste of time and money. It's a lot like marketing to the wrong customers.
Your messaging could be fantastic, but if your ad shows up in front of the wrong person, then it's not effective. LinkedIn ads can't save your relationship, but it can help you target and filter your audience by industry, company, and role. No more wasting time and money on the wrong people. It's 2025.
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Chapter 2: Why is a Forbes '30 Under 30' recipient on trial?
Know your worth, kings and queens. You tell them, Neil. LinkedIn will give you a $100 credit on your next campaign, so you can try it yourself. Just go to LinkedIn.com slash MBD. That's LinkedIn.com slash MBD. Terms and conditions apply only on LinkedIn ads. Death, taxes, and 30 under 30 members running into trouble with the law.
Charlie Javis, an alum from Forbes Distinguished List, is standing trial in a Manhattan federal court today for allegedly fraudulently inducing JP Morgan into buying her fintech company, Frank. Javis was once celebrated as a rising star in the fintech world and snagged a spot on Forbes' 30 Under 30 list after starting Frank in 2017, just four years after graduating from Penn.
The company helped students applying for financial aid and eventually attracted the attention of JP Morgan, who spent $175 million to acquire it in the hopes of folding in some of Frank's 4.25 million young users into its banking ecosystem.
The only issue, according to prosecutors, 90% of those users were fake, manufactured by a data scientist working under Javis and Olivier Amar, Frank's former chief growth officer. Neil, this case is an egg-on-the-face moment for JPMorgan, not necessarily financially. The price tag was relatively small for a bank of its size, but reputationally.
Plus, it's another instance where a young, charismatic founder a la Elizabeth Holmes, a la Sam Bankman-Fried, is standing trial for fraud, which has so far led to jail time.
Yeah. So how did JP Morgan find out that these email lists that they acquired was not as big as they thought? Just months after the deal closed, they sent out marketing emails to a batch of 400,000 supposed Frank customers. They found out that only 28 percent of the emails were even delivered and just one point one percent were open.
That's according to the lawsuit that JP Morgan filed against Javis, which is separate from this government case. So if I saw something like 1.1% were open, that'd be bad for the Morning Brew newsletter. It's even bad for a company you paid $175 million for. So they started digging in and found, and they contend that most of this list was made up.
It was just a very tough look for J.P. Morgan because let's go back to September 2021. J.P. Morgan's CEO, Jamie Dimon, said the bank wants to be a lot more aggressive in its approach to acquisitions. They see this young and up-and-coming company in Frank, so they go all out. They add it to their fold. But then J.P. Morgan's Jamie Dimon has come out and said that deal was a huge mistake.
But that's the question here that prosecutors are trying to uncover here is that is – buyer's remorse necessarily the same as criminal fraud. Javis says that she has, all you have to do is Google what she's talked about her company. And she says, there's plenty of instances of me referring to our user base in the hundreds of thousands, not in the millions.
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Chapter 3: What is DOGE's interest in accessing the IRS database?
other Forbes under 30 and being convicted for fraud. How's everyone doing on their taxes? You making progress? The folks at the Department of Government Efficiency do want to know.
A young software engineer working under Doge is expected to be granted access to the IRS's taxpayer system, a highly sensitive database containing private information on millions of Americans' tax returns, social security numbers, and banking details. The Internal Revenue Service is the latest agency to be infiltrated by Doge in its blitz to cut costs across the federal government.
But the IRS is an outlier in the type of information it holds on American citizens. And some IRS employees have raised alarms that A political appointee would be granted access to the database known as the integrated data retrieval system because of the highly private nature of its contents.
This thing is kept under more lock and key than a Gringotts vault with only a select number of IRS workers allowed in to accomplish a specific and official task before getting out as soon as that's done. White House Deputy Press Secretary Harrison Fields defended the move, saying waste, fraud and abuse have been deeply entrenched in our broken system for far too long.
It takes direct access to the system to identify and fix it. But a similar Doge initiative to review Treasury Department payments has been blocked by a judge, and it's likely this IRS project could also find its way to court.
Yeah, we are seeing this pattern play out across multiple agencies. I mean, just over the weekend, the top Social Security Administration officials stepped down after Doge members were trying to access sensitive personal data about millions of Americans. What are we seeing right now in the IRS? Doge official stepping in, trying to access sensitive data about millions of Americans.
The judge already pushed back against doing the same thing in the Treasury payment. So clearly this is a pattern that Elon Musk's Doge agency is trying to carry out. And we are going to see constant pushback because you are right. It's extremely sensitive data.
If it falls in the wrong hands, it violates Americans' privacy, but also can be dangerous if that data is weaponized against the American people.
Yeah, in fact, taxpayers who have had their information wrongfully disclosed or even expected in this database are entitled by law to monetary damages. The IRS commissioner themselves is not allowed into this database. It is very highly secure. Zooming out, though, the IRS has been this lightning rod for discussions and debate about how to modernize its system.
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Chapter 4: How did Argentina's president get involved in a cryptocurrency scandal?
calling it the fastest construction and destruction of wealth in history. $4.5 billion worth of capital was erased in seven hours. That means a lot of people who saw Millet's tweet believe in him and said, oh, this would be good for the Argentinian economy, put in money, and they lost... Many people lost all of it a mere hours later.
Yeah, one of the issues was Libra. This coin had very flawed what they call tokenomics in the crypto space. 82% of the supply was unlocked and sellable from the start. Whenever you launch a coin like this, you do want to check what is the lockup period for when insiders can actually sell their stakes. This...
had far too much supply available that people could immediately cash in and make a quick profit on it, which is why insiders, as soon as he tweeted out, sold their stake when it rocketed upwards and left just the normal people holding the bag. So it also... filtered through to the rest of the Argentinian stock market investors in Buenos Aires.
It started dumping a lot of shares in big local companies. Their benchmark index actually saw its biggest intraday drop in roughly three weeks as this filtered through the economy. Then I also just mentioned that there's a Venn diagram of world leaders who have also messed around with crypto. Trump is squarely in the middle of that as well.
And Trump and Milley have kind of had this buddy-buddy relationship. So to see them both messing around in the crypto world, not necessarily in the most responsible way, is something that's a little bit alarming when you just zoom out on a global political scale.
Yeah, I think people who are in the crypto space are saying, please stop doing this. You're ruining not only your credibility, but the cryptocurrency industry's credibility by promoting these sham coins. Up next, it is our winners of the weekend.
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Rates as of January 1st, 2025. Member FDIC. Terms and more at applecard.com. Neil, you've had the chance to work with plenty of strong leaders in your career. What traits do you think are the most important?
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Chapter 5: Who are the winners and losers of the long weekend?
Yeah, a lot more spending is going to be needed, and that is not me saying it. That is NATO Secretary General Mark Rutt saying that. He said that... NATO's spending will have to be considerably more than 3% of GDP, where its current target is 2%, agreed upon all the way back in 2014. But it's not just that NATO spending needs to go up.
It's that they think that a lot of that spending is not going to come from America. They are trying to resist the siren's call of just relying on America for all their weapons. And so that is why you are seeing this big boost of Europe's defense industry, because
If spending is going up and those arms need to come from somewhere and if they're not coming from America, that means they're probably coming from European weapons manufacturers.
Right. So they had this target of 2.2 percent of GDP from all NATO countries going to defend spending in 2020 and 2014. It is currently inching up, but across NATO countries, European defense spending is now at an average of 2.2% of GDP last year. Poland is the only country that is anywhere near 5%, which is what Trump has urged Europeans to get to. The rest are around 2%.
You're going to see France, Germany, the U.K., all of these countries spend way more on defense. That is boosting shares. And you also saw bond yields across Europe spike yesterday because investors also expect there to be a borrowing boom to finance these defense plans.
My winner of the weekend is the sport of hockey because Neil, I, along with many other people who can't explain the icing rule, actually watched it this weekend. The reason for our hockey curiosity is a tournament called the Four Nations Faceoff, which features NHLers from USA, Canada, Sweden, and Finland.
It's an international competition that the NHL cooked up as a replacement for its mid-season all-star game. And boy, has it blown expectations out of the water. Saturday's game between the U.S. and Canada averaged 4.4 million viewers on ABC, making it the most watched hockey broadcast in the U.S. outside of Stanley Cup finals since 2019.
A big reason for its success is just how much the players care. Saturday's game in Montreal started with the home crowd booing the U.S. national anthem, followed by three consecutive fights within the first minute. Contrast that to, say, the NBA All-Star Game, which was also hosted over the weekend, and the massive gulf in effort between the two was clear. Canada and the U.S.
won yesterday to set up a rematch in the final, which will be held in Boston. Guess all you need for a successful midseason exhibition is some tense geopolitics and a willingness to drop the gloves.
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Chapter 6: What should we expect in the upcoming week?
Now for a special Tuesday edition of the week ahead on account of it being a holiday yesterday. Here are the major events to look out for this week besides that big game on Thursday. Walmart earnings later will be a closely watched gut check on the U.S. consumer. Things don't appear to be trending in the right direction. Consumer sentiment has fallen to its lowest level in seven months.
Retail sales posted their biggest drop in almost two years in January, and inflation is picking back up, surging the most in nearly a year and a half last month. As the nation's biggest retailer, Walmart will either put some of those fears to rest or send investors into something resembling panic mode.
Those retail sales from January do have some explanation attached to them, though. One, we had this huge cold spell across the country, which, you know, usually keeps consumers inside their houses. And then also the number from December was revised higher. So it was just a rejiggering of some of those numbers.
That being said, though, you do want to see if you are looking at the wider retail industry. Walmart's a great bellwether for that. So you want to see those, you know, coming in stronger than expected.
What is Tim cooking up at Apple? On Wednesday, Apple is expected to drop a new product after Cook teased last week, get ready to meet the newest member of the family. If he's not getting a dog, it could be that he's going to unveil the next generation iPhone SE4.
But other reports speculate the new family member could be a MacBook Air, an updated iPad, or a new HomePod, the smart home command center. Maybe it's all four. We'll find out tomorrow. I know.
People were pouring over every single word in this announcement. The language, newest member of the family, makes people think that it won't just be a continuation of the iPhone SE. It probably will be a similar product to the iPhone SE, but it might have a different name and it might be folded in closer to their broader iPhone offering. So it could be just semantics.
It could be something completely different. But it was interesting to see Apple analysts going, newest member of the family. What does that mean? It has to mean something. different.
Alright, I've waited so long to say this. Spring training is back. Baseball returns to sunny Arizona and Florida this week as teams kick off a month of preseason games. This offseason was marked by massive spending by the wealthiest teams to bolster their rosters.
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