Big day for business fraud, Jamie Dimon's bank warning, Billionaire Trivia

0:00As a podcast producer, I spend a lot of time listening to people spit straight bars. But now I found a truly incredible bar, David Protein Bars. They have 28 grams of protein, 150 calories, and 0 grams of sugar. So they're ideal for when you need a quick, high-protein snack without the excess calories. After weeks of being out of stock, David is officially back in stock on their website. Right now, when you buy four cartons of David Bars, you get your fifth one free. Head to davidprotein.com slash mbd to get yours. That's davidprotein.com slash mbd. If you prefer to shop in person, check out their store locator on their website.

0:50Good morning, Brew Daily Show. I am Neil Freiman. And I'm Toby Howell. All right, so I get this text from Toby yesterday. It's 530. We're about to take our podcast field trip to the Yankees-Phillies game. I get this text. I open it up. Yo, I'm running to game. Could you possibly bring an extra jacket with you that I can wear when I arrive? And for other people, this might not be seem a little confusing, but yeah, I know Toby and it means he was literally running to the game from lower Manhattan to Yankee stadium. It was eight miles. It wasn't even that bad. And it was so fun. Actually, I ran on one Avenue the whole way and I got to see like the neighborhoods change as I went through.

1:33it it's a great way to see new york just running the whole island i just wonder how many people have ever run to yankee stadium maybe maybe single digits i was literally sweating walking through the crowd while everyone is just like getting hammered and drunk and i was like it was an interesting experience for sure but you also picked up this beautiful yankees hat yeah i know i'm wearing it i i for a hat pod my first hat pod yeah it's exciting uh let's figure out what we're going to talk about in this show. A couple things. Jamie Dimon gives his thoughts on the banking crisis. He's the J.P. Morgan CEO.

2:08Women's soccer scores a landmark investment. We'll talk about what that was. And I am going to quiz Toby on billionaires. Oh, boy. I wish it was about myself in that list, but it is not yet. Well, we're working on that. Yeah. But first, yesterday, Donald Trump became the first former president to appear as a criminal defendant in a U.S. courtroom. He was arraigned over his indictment last week, and the charges, which were until now kept under wraps, were released. He pleaded not guilty to all 34 felony counts against him. This is a very complex white-collar criminal case about falsifying business records relating to hush money payments to Stormy Daniels in order to keep her quiet about an alleged affair with Trump.

2:50So, just gonna wanna break it down. Here's what prosecutors are saying Trump did and why he is a criminal, according to them. Trump's former lawyer, Michael Cohen, whose name has come up a lot, paid Daniels$130 ,000 in 2016, right before the election. Then in 2017, Trump and his company, the Trump Organization, reimbursed Cohen. But when they did that, they disguised those Cohen payments as legal fees for services performed that year. And Manhattan Attorney General Alvin Bragg, who brought this case, says that was false and illegal. Like, you can't do that. you're messing with your books. All right.

3:26So we've got that down. But in order for this business record falsification to be a felony instead of a slap on the wrist misdemeanor, Bragg has to show that Trump falsified those records in order to conceal or commit another crime. Bragg says those payments violated campaign finance laws, but didn't mention any particular specifics. So that in a nutshell is the case that prosecutors think they can bring on Trump. I feel like I'm on law and order right now. We just got the case broken down. Yeah. Neil, the word that comes to mind when you hear this case, at least what legal experts have been saying, is that it is precarious on so many levels.

4:02So many things hinge on little technicalities and untested precedents. One of those technicalities is the statute of limitations in New York. So this case concerns payments that happened between 2016 and 2017, which is more than five years ago, which is the statute of limitation of felonies in New York. And so they need to prove that Trump has spent a continuous period outside of New York, which is a way to suspend that statute of limitations. And there is some argument for that because Trump obviously was president during that time. And he also spent a lot of time in Florida. So this case could be dead in the water, though, if they can't, can't prove that he spent enough time outside of New York for them to suspend the statute of limitations.

4:45Another technicality I was reading about is that, you know, Bragg is trying to charge him under New York state law, but this campaign finance violation that he wants to also get him on is a federal law. And this has never been done before where you kind of charge someone under federal law in the state of New York. The courts just have not come to a decision on that. So that's another reason why Trump's lawyers are going to try to, you know, make that point. And this case could get tossed. So yeah, Bragg has gotten a lot of heat from Republicans, obviously, and some Democrats for bringing the case that's against a former president.

5:20You better have your ducks in order. And this has been a little shaky. How he responded was, I thought, a little interesting, especially for those of us in the business news sphere. He said that he was trying to protect the integrity of New York as a finance capital of the world. And you need to have a tight rule system in place around business record keeping so that when people do business in New York, everything is above water and everybody's trustworthy. But I watched his press conference and the entire time he was like, I've done this a million times before. Like, this is my bread and butter.

5:49In New York, prosecutors have filed more than 280 felony counts of falsifying business records since 2019. Yeah. That's a really interesting wrinkle is that they are protecting the integrity of New York as a financial capital. That's what they claim. Right. And so that is something, it does reframe it. People have been obviously putting their own readings on the situation, but to brag, it might just be, yeah, another day in the office. He's like, of course I'm going to prosecute. It doesn't matter who it is. Obviously, it might be, it is different at a certain level because he is a former president.

6:20But yeah, that's an interesting wrinkle. Two other kind of butterfly effects from this, obviously, is that Trump is profiting. Always be selling. Always be selling. Always be deal-making. So the two stats I want to bring up are one, his NFT project that he launched back in December was actually jumped 413 % in the last few days. That number is a little bit misleading though, because the total volume is really, really low still. Only like$68 ,000 worth of NFTs were traded. That's down from the 3 million that was traded back in December and it's peak. But still that headline number of his NFTs jumping 413 % is headline worthy.

7:01And then the other thing Trump started doing was obviously started selling t-shirts with his face on it with a fake mugshot of him holding a prisoner number that says 45 and 47, mentioning that he was the 45th president and wants to be the 47th president. So it's very easy to predict that Trump was going to find a way to cash in on this in some way. He's a good marketer. Yeah, he really is. And so, yeah, looking ahead, there's all this stuff that's going to happen before this even goes to trial. Like we mentioned, the Trump's lawyers are going to throw literally everything at the table to try to get this tossed out.

7:39If it does go to trial, then it will not happen for a few months and it could have been right in the thick of the campaign. We're going to be talking about this story going forward. We can guarantee that. OK, Neil, we're going to go to another case of financial fraud. Big fraudulent morning this morning. But Neil, we know all about the Kentucky to the NBA pipeline. We also know about the Ivy League to consulting pipeline. But today we're talking about the Forbes 30 under 30 to prison pipeline, which is unfortunately a thing. So that's right. Another Forbes 30 under 30 founder has been charged by the DOJ with defrauding JP Morgan Chase for$175 million.

8:21This is a wild case. So essentially, Charlie Javis is this founder of a fintech firm called Frank, which was marketed as this tool to help parents and students navigate the financial college aid process. They had this massive email list of$4.25 million, which was really tasty for JP Morgan, who wanted to snag those emails. And so they paid$175 million for this supposedly growing and prosperous fintech firm. Well, turns out that was fool's gold. JP Morgan quickly realized that the majority of those emails were probably fake. And they realized that when they tried to email 400 ,000 of them and 70 % of the emails bounced back, which, Neil, that's not a good open rate.

9:04Not a good open rate. So yeah, it's just another example of kind of a Forbes 30 under 30 founder doing something a little naughty. Maybe. I was looking at Javis's response just to see what she was saying to this. She basically kind of owned up to falsifying this email list, but also said that J.P. Morgan was in such a race to buy Frank that they kind of pressured her to falsify data as well. So it was kind of interesting because we've seen these big, big banks try to get by, scoop up these little fintechs that have access to younger potential customers in the future. and so Javis is saying that there was this race to buy her between all the big banks and JP Morgan was foaming at the mouth and Jamie Dimon was like I need to buy you so make it make it look good so that's her defense but we'll see what happens yeah it's definitely JP Morgan is not without fault in this like come on do just a little right diligence yeah and it was interesting though to see some of the details again this is not set in stone yet but these are some of the details that coming out is that javis paid a data science professor 18 000 to fabricate some of these fake customers i don't know if that's a good deal for the data scientists or a bad deal i feel like they weren't named in the lawsuit so you get paid a little bit 18 000 though for millions of fake addresses i don't know how easy you gotta raise your rates a little bit buddy also this is the money quote basically that um you know she pressured this she allegedly pressured one of an employee an employee to help her uh allegedly i'm just saying allegedly five million times this podcast uh to pad these numbers and the employee raised legal concerns and then she goes we don't want to end up we don't want to end up in orange jumpsuit it's tough that that's on record can we end on the forbes yeah mention though this is like a classic come on man situation let's just say that i i hope this podcast never gets mentioned in forbes because here's just a little bit of what they've done.

11:05So SVB was on their America's Best Banks list for five straight years, including earlier this year. Yes, SBF was on the cover. Adam Newman was on the cover. Elizabeth Holmes was on the cover. It's a tough crowd to belong to. You don't want to be, yeah, again, you mentioned it, but if our faces ever show up on the cover of Forbes, just run. Stop listening to the podcast. Distance yourself from us because something's going wrong. All right, Moving on, let's stick with JP Morgan. I am here with some shocking news, Dobie. A bank CEO is blaming regulators on the recent banking crisis. Can't believe that.

11:40The CEO is JP Morgan, Jamie Dimon, who published his closely watched annual shareholders letter yesterday. This was his first public remarks on what happened in the SVB collapse. And he's the CEO of the biggest bank in the country. So everyone's kind of waiting to hear what he is going to say about it. So he said that regulators missed risks that were hiding in plain sight and also created rules that encourage banks to buy up these long dated treasuries that collapsed in value when the Fed raised interest rates. Yeah. These letters are always so interesting to me because, one, it's a shareholder letter.

12:14So on half of it, he has to show that the bank's in a great spot, like JP Morgan's doing well and has this weird, almost false optimism. And then it's part pedestal for him because he knows everyone's going to read it. So he kind of pushes forth his agenda. Yeah, he kind of laid into regulators, talked about everything from like he talked about climate change. He talked about anything he wanted to talk about because he knows he has this platform. So I always enjoy kind of like piecing or parsing through what is said in these things. But yeah, he also he blamed he got into specifics on SVB and blamed the fact that its deposit base was like so concentrated.

12:51He called that the unknown variable that caused all this. But yeah, he did basically say that the banking crisis isn't over. One other thing I thought was interesting is that there's this narrative that the banking crisis really benefited the bigger banks because all these outflows went from the small regional banks to the big banks. But he said, while it is true that this bank crisis benefited, in quotes, larger banks, the notion that this meltdown was good for them in any way is absurd, which again, he's the CEO of the biggest bank. So, I mean, just to end on a positive note, Jamie Dimon also said that, you know, things were generally pretty good.

13:29He said that businesses are pretty healthy and credit losses are extremely low. And he said it's likely that 20 years from now, America's GDP will be more than twice the size it is today. I really hope that is for my stock portfolio. And then he also took a little inspo from Buffett, who's obviously the most famous shareholder letter writer. and he said, my friend Warren Buffett points out that his company's success is predicated upon the extraordinary conditions our country creates. He is right to say that his shareholders, that when they see the American flag, they should all say thank you. Oh my God.

13:58We should too. They love a little like rah-rah American. Love a little rah-rah. Yeah. Okay, that was a very fraudulent beginning of the show, but before we jump into the next part of our show, let's take a quick break. In America, half of every dollar spent on brand medicines goes to entities who don't make them. While middlemen like PBMs and 340B hospitals drive up costs, Biopharma is investing$500 billion in new infrastructure and manufacturing here at home and helping patients buy medicines directly at lower prices. Tell Washington to end middlemen markups and put American patients first. Visit phrma.org slash middlemen.

14:43This message may be shocking to many millennials. If you are one, you might want to sit down. Right now, loads of people are searching the following on Depop. Low-rise jeans, halter top, velour tracksuit, puka shell necklace, disc belt. You likely placed these in the dark of your closet in 2004, never to be seen again. But if you can find it in yourself to dust them off, there are a lot of people who will give you money for them. Sell on Depop, where taste recognizes taste.

15:39its office micro kitchens, which is kind of sad for a lot of people. It is trimming its spending on personal laptops. And then it's even cutting back on the number of staplers and tape it orders. So they're really hitting all fronts of the company scaling back. So this memo is just one example of what people are calling a perk session going on at big tech firms. Is it a buzzword that I actually think is happening? Yeah, for sure. I don't know. This is getting a lot of headlines because Google, it was the goat when it comes to free perks. They symbolize the excesses, the pampering of tech workers 10 years ago as exemplified by Silicon Valley.

16:21I think Silicon Valley on HBO is going to be like a really like an historical document about this golden age of tech that we are now leaving. Yeah, no, that show was so good. Yeah, it was so good, but it also exemplified this excess, this venture capital boom pouring into tech companies. These big tech companies were offering every type of perk imaginable. I mean, everyone talked about the nap pods, ping pong tables, but it was also weight. That was just kind of the window dressing. The biggest things were free food. Right. A lot of people, free food is crazy. Yeah, it costs a lot. And this wouldn't be a perk session though, if it was just Google.

16:57So I will go through some of the other perks that are being cut. So Facebook is cutting its free laundry and dry cleaning services. Did not know that they had that. Unreal. I would love that. So Morning Brew, if you're listening. And then Twilio cut its employee allowance for wellness in books. Again, book. I didn't know they had a book. We have a book one. All right. Let's go. And then Salesforce got rid of its specialty coffee baristas at its office in San Fran. and it also got rid of its paid wellness day once a month for employees. So I guess you can call this a perk session. Like people are cutting everything.

17:34I just remember going to, we were in a WeWork in the early days of the brew and in our WeWork building was a WeWork office too, like corporate HQ. I remember going in, it was the most beautiful space I've ever been in. And instead of going to get a coffee from a Keurig, you went up to this coffee bar and there was an actual barista there making espresso drinks. Right, so Salesforce had that until very recently and just cut it. Yeah. We mentioned in the micro kitchens and I quizzed you before the show. I'm like, how many micro kitchens do you think Google has across its offices? And you said like 200.

18:06It's 1 ,300. They have 1 ,300 micro kitchens according to a 2019 Fast Company report. So when you hear those numbers, you're like, oh my gosh, like of course you have to close. They've become ghost kitchens now. Yeah, literally. And before we go, I just wanted to say, I was just thinking about like what can we draw from this? Is there any deeper insight? And obviously it symbolizes the labor market cooling for tech workers. They obviously don't think that they need to recruit as many workers as they have in the past, which is quite obvious because they've all been laying off people. They still need high performers to come to the they're still hiring the best people to come work there on things like AI.

18:47and maybe high performers are not as motivated by the perks and they're more motivated by the type of work that they're doing right um so that that's what that's your philosophical that's my i totally agree like the the a plus players are the people they don't really care about the perks although they did say that the biggest perk is just working remotely still it's like that's still a thing so yeah friday job report coming out we'll actually get to see if that is playing out in like the broader macro environment. All I need is good coffee, maybe a few snacks and I'll be happy. And a window. I like being next to a window.

19:24All right, let's move on. Women's sports, so hot right now. So hot. So hot. Yesterday, private equity firm Sixth Street Partners committed$125 million to buy a new expansion team for the National Women's Soccer League, the U.S.'s top soccer league for women. This was a landmark investment for a couple of reasons. First, it's the first institutional investor to become the majority owner of a professional U.S. sports franchise. While that's common in other countries, U.S. leagues have typically banned it. Second, it's the biggest institutional investment made in a pro-women's sports team, period.

19:57Yeah, it's huge. We're digging into the numbers. They're spending$40 million on a practice facility, which is going to be really nice. $53 million is going to the expansion fee, which is just a massive increase. The last price that was paid for an expansion fee,$5 million. So this is a 10x increase over it. I feel like they got kind of a bad deal on it. They got gypped a little bit. Like the last person paid$5 million, you're paying$53 million. But yeah, it just goes to show like the trajectory that the NWSL and just women's sports in general are on right now. There's a lot of celebrities in this league.

20:33Yeah. A lot of celebrities. Celebrity owners, yeah. Celebrity owners, yeah. Yeah, they're not playing. um cheryl sandberg the former uh meta executive facebook executive is joining the board of this new team there are four former u.s women's national players that are minority owners and we have to talk about angel city fc which launched a couple years ago which is a new team natalie it was led by natalie portman eva longoria meham and serena williams and serena williams husband alexis ohinian who co-founded reddit so there's a lot of star power in this league the big thing that the CEO of Sixth Street, who led the investment, said that this was not a moral or a...

21:14Actually, as Allie Wagner, who's part of the ownership group, said, it's not a heartstring decision or a moral decision, which is what a lot of people looked at women's either correctly or incorrectly for the last couple of years, investment in women's sports. But the Sixth Street CEO said that everything indicates something is structurally undervalued when they're looking at investing in this team so they're truly treating it as an investment that they expect to pay off in the long run because yeah the numbers are there the eyeballs people are talking about it i mean this week on on social media at least on my social media has been dominated by the iowa lsu women's college basketball game that has had a shelf life of four days right the the thing now is that jill biden the first lady invited the big mistake here big mistake i'm not a i'm not a white house press uh person but not a great communications thing but they uh joe biden invited iowa and lsu to come to the white house even though iowa lost and then the entire state of louisiana and all the lsu players are just furious furious yeah and uh angel reese uh one of the players on lsu has also been in this other controversy uh said you know i I don't need you.

22:25I'm going to Obama's. That's good right there. Yeah. All right. So we'll keep an eye on that and very excited for this World Cup that's coming up this summer. Yep. All right. Let's talk finally about the Forbes billionaire list that just came out yesterday. LVMH founder and CEO Bernard Arnault is at the top, becoming the third person ever behind Musk and Bezos to reach$200 billion in net worth. So, Toby, we usually go to trivias on Wednesday night, but we can't tonight because of Passover. And so I've decided to write a little quiz for you. And I just want you just it's hard. OK, it's hard. I don't expect you to get.

23:03I've been dreading this, but we're not going to think you're dumb. Just I want it. We also want to hear your thought process, your thought process. OK, here we go. I have four questions with a net worth of thirty seven billion dollars. mark matisich i think i pronounced that right has a fortune that's 10 times as big as the second wealthiest young billionaire the 30 year old austrian inherited his fortune from his mega billionaire father dietrich who died last year what company did dietrich co-found oh we have music we have some jeopardy ripoff music okay on this one i actually know i think i know it because austrian you mentioned austrian yeah and the only company that's gigantic out of austria is red bull the let's go one out of one that one underestimated that one was good because you you added the austria tip we need a bell all right you're one out of one here we go give your best estimate for how many billionaires there are in the world oh i'll give you credit for their clothes in the world okay i'm gonna guess there's probably 300 in the u.s 200 out i'm gonna say 500 to 500 not quite you're underestimating capitalism right there man 2 2 640 2 600 yeah maybe oh is there 500 just in the u.s i guess there's got a boy more than 500 in the u.s that's too many for the most oh my god all right one out of two rank the following billionaires by net worth okay Zuck, Bill Gates I should have told you to bring in a pen Zuck, Bill Gates, Bezos and Buffett I know I think Bezos is first still Buffett I think is second now Zuck is third and Bill Gates is fourth Wow, that's Bill Gates slander You were close, it was Bezos, Buffett Gates and then Zuck Zuck is 16 Dang it, I thought that Oh,$16 billion?

25:00No, no, no. Sorry. 16th on the list. And those other guys are in the top 10. Okay. Makes sense. I thought that Zuck had this late-stage comeback because Meta's up like 100 % this year. Yeah, I don't know why. Maybe he sold so much of the company to Peter Thiel in the early days. You would think he built a$500 billion company by his own, and he's not worth more than, you know, Bill Gates. I don't know. I guess Bill Gates and Bezos and Gates did all the same thing. Yeah. All right. Final question. with a net worth of$80.5 billion, Francois Betancourt Myers is the richest woman in the world. She is the heiress to which French beauty company?

25:37Oh my God. Like, I feel like they're all under LVMH at this point. Well, which one isn't? Chanel? No, it's not a luxury company. It's beauty. You see their - L 'Oreal. L 'Oreal. L 'Oreal. I think I - Should we give it to him? Yeah, give it to me. All right, we'll give it to him. We'll give it to him. I got the horns. We'll give it to him. This is good. Yeah, not bad. I'll give you 2.5 out of 4. That was a lot of fun. Pretty good job. Thank you. Thank you. Next week, you have to quiz me. Yeah. I guess I underestimated capitalism, though. You're totally right. All right. Before we hit the credits, we have to shout out an absolute king, Claus Tober, Tuber, who died a few days ago.

26:13He created the board game Settlers of Catan back in 1995, which has become one of the most beloved games around the world, and Toby and I are also a big fan. Toby's a big player. I'm very much an amateur settler, but we love Settlers of Catan. It's sad, though. he's such a good guy. Do you know him? Well, no, I just know it because he created the game because he hated his job, which we can all relate to. I mean, not us. We love our jobs. But because he was working in the dental industry and he used it as an escape, he created this island, his own world, and it's just become one of the most beloved games in the world.

26:44Yeah. Yeah, I was thinking, we got a Dungeons & Dragons movie. When is Catan? Catan movie's coming out. We'll see it. A fight over ore. Yeah. All right. Now the moment you've all been waiting for the credits. Take us out, Neil. All right. Please email us at morningbrewdaily at morningbrew.com. Recipes. Passover. Passover recipes I'm cooking, so I need a lot of ideas in the next 12 hours, eight hours, or anything else you want to say to us. Show's producer and editor is Emily Milliron. The show's technical director is Justin Orlando. Evan Froloff, welcome to the show. He's the associate producer.

27:21Our supervising producer is Bryce Beloff. Dan Bauza is our master of sound. Hair and makeup got cut along with all of our other perks. Devin Emery is our chief content officer. Our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

27:44Next up is a little song from CarMax about selling a car your way. You want to sell those wheels? You wanna get a CarMax instant offer So fast Wanna take a sec to think about it Or like a month Wanna keep tabs on that instant offer With OfferWatch Wanna have CarMax pick it up from your driveway You wanna get it done to it You wanna do it all So, wanna drive? CarMax. Pickup not available everywhere. Restrictions and fee may apply.