JP Morgan Says Startup Founder Used Millions Of Fake Customers To Dupe It Into An Acquisition

JPMorgan Chase is suing the 30-year-old founder of Frank, a buzzy fintech startup it acquired for $175 million, for allegedly lying about its scale and success by creating an enormous list of fake users to entice the financial giant to buy it. Forbes: Frank, founded by former CEO Charlie Javice in 2016, offers software aimed at improving the student loan application process for young Americans seeking financial aid. Her lofty goals to build the startup into “an Amazon for higher education” won support from billionaire Marc Rowan, Frank’s lead investor according to Crunchbase, and prominent venture backers including Aleph, Chegg, Reach Capital, Gingerbread Capital and SWAT Equity Partners. The lawsuit, which was filed late last year in U.S. District Court in Delaware, claims that Javice pitched JP Morgan in 2021 on the “lie” that more than 4 million users had signed up to use Frank’s tools to apply for federal aid.

When JP Morgan asked for proof during due diligence, Javice allegedly created an enormous roster 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, according to the suit, Frank had fewer than 300,000 customer accounts at that time. […] Frank’s chief growth officer Olivier Amar is also named in the JP Morgan complaint. It alleges that Javice and Amar first asked a top engineer at Frank to create the fake customer list; when he refused, Javice approached “a data science professor at a New York City area college” to help. Using data from some individuals who’d already started using Frank, he created 4.265 million fake customer accounts — for which Javice paid him $18,000 — and had it validated by a third-party vendor at her direction, JP Morgan alleges. Amar, meanwhile, spent $105,000 buying a separate data set of 4.5 million students from the firm ASL Marketing, per the complaint.

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SEC Alleges Gemini, Genesis Sold Unregistered Securities

The U.S. Securities and Exchange Commission (SEC) alleged crypto exchange Gemini and crypto lender Genesis Global Capital sold unregistered securities in a lawsuit filed late Thursday. CoinDesk reports: The investment regulator took aim at Gemini Earn, the troubled yield-bearing product that hundreds of thousands of U.S. investors entrusted with their crypto. Gemini generated yield on billions of dollars in crypto by loaning deposits to Genesis, which loaned them out again. But Genesis’ November closing of lending withdrawals left some 340,000 Gemini Earn customers and about $900 million in crypto in limbo, the SEC said. The regulator accused the popular program of being an unregistered security. “Defendants offered and sold the Gemini Earn Agreements through the Gemini Earn Program without registering” with securities regulators, the complaint said. “As a result, investors lacked material information about the Gemini Earn program that would have been relevant to their investment decisions.”

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Apple Watch Patent Infringement Confirmed, As Masimo Seeks Import Ban

An anonymous reader quotes a report from 9to5Mac: Apple has suffered a setback in its long-running Apple Watch patent infringement battle with medical technology company Masimo. A court has ruled that Apple has indeed infringed one of Masimo’s patents in the Apple Watch Series 6 and up. Masimi is seeking a US import on all current Apple Watches. If granted, this would effectively end Apple Watch sales in the US, as the company would not be allowed to bring in the devices from China.

The battle between the two companies has a long history. Back in 2013, Apple reportedly contacted Masimo to discuss a potential collaboration between the two companies. Instead, claims Masimo, Apple used the meetings to identify staff it wanted to poach. Masimo later called the meetings a “targeted effort to obtain information and expertise.” Apple did indeed hire a number of Masimo staff, including the company’s chief medical officer, ahead of the launch of the Apple Watch. Masimo CEO Joe Kiano later expressed concern that Apple may have been trying to steal the company’s blood oxygen sensor technology. The company describes itself as “the inventors of modern pulse oximeters,” and its tech is used in many hospitals.

In 2020, the company sued Apple for stealing trade secrets and infringing 10 Masimo patents. The lawsuit asked for an injunction on the sale of the Apple Watch. Apple has consistently denied the claims, and recently hit back with a counterclaim of its own, alleging that Masimo’s own W1 Advanced Health Tracking Watch infringes multiple Apple patents. Reuters reports that a US court has ruled against Apple on one of the patent claims.

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App Store Developers Have Earned $320 Billion To Date, Says Apple

Apple today shared an update on its subscription businesses and global App Store, noting that the tech company has now paid out a record $320 billion to app developers since 2008 — a number that reflects the revenue apps have generated, minus Apple’s commission. From a report: In addition, the tech giant said it now has more than 900 million paid subscriptions across Apple services, with subscriptions on the App Store driving a “significant” part of that figure. […] The company noted that more than 650 million visitors from 175 regions worldwide visit the App Store every week and it’s still delivering new experiences. Among the highlights was the launch of Apex Legends on mobile earlier this year, and the growing popularity of a new form of social networking with BeReal, Apple’s “app of the year.”

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Many People Aren’t Sticking Around Mastodon

The number of active users on the Mastodon social network has dropped more than 30% since the peak and is continuing a slow decline, according to the latest data posted on its website. There were about 1.8 million active users in the first week of January, down from over 2.5 million in early December. The Guardian reports: Mastodon, an open-source network of largely independently hosted servers, has often been touted as an alternative to Twitter. And its growth appears connected to controversies at Twitter. But for many it doesn’t fulfill the role that Twitter did and experts say it may be too complicated to really replace it. […]

There were about 500,000 active Mastodon users before Elon Musk took control of Twitter at the end of October. By mid-November, that number climbed to almost 2 million active users. […] The surge in new Mastodon users continued throughout November, peaking at over 130,000 new users a day. The upticks often coincided with controversial decisions made by Elon Musk. Data from Google suggests there was also a surge in searches for Mastodon in April 2022, around the time Musk announced he had become Twitter’s largest shareholder.

“Twitter, in its most basic form is simple,” Meg Coffey, a social media strategist, said. “You can open up an app or open up a website, type some words, and you’re done. I mean, it was [a] basic SMS platform.” For many, Mastodon may have proved too hard to port over their communities and was just too complicated. Some may have gone back to Twitter, while others, said Coffey, may have dropped social media entirely. “Everybody went and signed up [on Mastodon] and realized how hard it was, and then got back on Twitter and were like, ‘Oh, that’s, that’s hard. Maybe we won’t go there,'” she said. “It’s like the people that said ‘I’m moving to Canada’ when Donald Trump was elected,” Coffey added. “They never actually moved to Canada.”

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Meta Abandons Original Quest VR Headset

Meta is dropping support for its first Meta Quest VR headset. The device will no longer receive future content updates, and by 2024 it will no longer get any bug fixes or security patches. Gizmodo reports: Notably, users will no longer have significant functionality. Though Meta promised you will still be able to use the headset and its installed games and apps, Quest 1 users will no longer be able to join parties, and they will also lose access to Meta’s feature product Horizon Home on March 5 this year. Users will no longer be able to invite others to their homes or travel over to another user’s home.

Meta CEO Mark Zuckerberg announced what was originally called the Oculus Quest in 2018 as the premiere wireless VR headset. The company released the headset in 2019 (so Meta is a little off in their letter when they said they launched the device “over four years ago”), and this was all before Meta officially renamed the devices and its various services in 2021. So the Quest 1 is working off four-year-old tech, and it would make some sense why Meta would not want to support aging hardware.

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The First Insider Trading Case Involving Cryptocurrency

The brother of a former Coinbase product manager was sentenced on Tuesday to 10 months in prison after pleading guilty in what U.S. prosecutors have called the first insider trading case involving cryptocurrency. Reuters reports: Nikhil Wahi admitted to making trades based on confidential information from Coinbase, one of the world’s largest cryptocurrency exchanges, when he pleaded guilty in September to a wire fraud conspiracy charge. Prosecutors said Ishan Wahi, the former product manager, shared the information with his brother and their friend Sameer Ramani about new digital assets that Coinbase was planning to let users trade. Ishan Wahi has pleaded not guilty, and Ramani is at large.

Prosecutors said Wahi made nearly $900,000 of profit by illegally trading ahead of 40 different Coinbase announcements. They recommended a 10- to 16-month sentence. At a sentencing hearing in Manhattan federal court, U.S. District Judge Loretta Preska said his crime was “not an isolated error in judgment.” “Today’s sentence makes clear that the cryptocurrency markets are not lawless,” Damian Williams, the top federal prosecutor in Manhattan, said in a statement. Further reading: Coinbase To Cut 20% Jobs, Abandon ‘Several’ Projects To Weather Downturns in Crypto Market

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Apple Is Reportedly Making An All-In-One Cellular, Wi-Fi, and Bluetooth Chip

Apple is working on a new in-house chip that would power cellular, Wi-Fi, and Bluetooth functionality on its devices, according to a report from Bloomberg. The Verge reports: The company is also developing its own chip that would replace the Wi-Fi and Bluetooth chip it currently uses from Broadcom, Bloomberg says, which it wants to begin using in devices in 2025. Bloomberg also shared some new information about Apple’s efforts to develop its own cellular modems to replace Qualcomm’s. While Qualcomm recently said it expects to have the “vast majority” of 5G modems for 2023 iPhones, Bloomberg says Apple will use its own modems “by the end of 2024 or early 2025.” It will apparently start by using its custom modem in one product and fully transition them over the course of approximately three years.

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MSI Intends ‘To Continue With Afterburner’ Overclocking App Despite Not Paying Its Russian Dev

Jacob Ridley writes via PC Gamer: MSI Afterburner is an app used the world over for graphics card monitoring, overclocking, and undervolting. It’s become pretty synonymous with general GPU tinkering, yet the app’s developer has suggested it might not have long left to live in a forum post earlier this month. MSI disagrees, telling us “we fully intend to continue with MSI Afterburner.” MSI Afterburner is developed by Alexey ‘Unwinder’ Nicolaychuk, a Russian national who has kept the overclocking app functioning over many years. Nicolaychuk is also responsible for the development of RivaTuner Statistics Server, which is part of the foundational software layer powering Afterburner. In a post on the Guru3D forums (via TechPowerUp), Nicolaychuk suggests that Afterburner’s development has been “semi-abandoned.” “…MSI afterburner project is probably dead,” Nicolaychuk says.

“War and politics are the reasons. I didn’t mention it in MSI Afterburner development news thread, but the project is semi abandoned by company during quite a long time already. Actually we’re approaching the one year mark since the day when MSI stopped performing their obligations under Afterburner license agreement due to ‘politic [sic] situation’.” Nicolaychuk says development of the app has continued over the past 11 months, but that may also be ending soon. “I tried to continue performing my obligations and worked on the project on my own during the last 11 months, but it resulted in nothing but disappointment; I have a feeling that I’m just beating a dead horse and waste energy on something that is no longer needed by company. “Anyway I’ll try to continue supporting it myself while I have some free time, but will probably need to drop it and switch to something else, allowing me to pay my bills.”

Development of the RivaTuner Statistics Server — software is pivotal to many of the functions of Afterburner — is materially separate from Afterburner and will continue, Nicolaychuk notes. Nicolaychuk suggests the issue comes down to Russia’s invasion of Ukraine, and we’ve since confirmed with MSI that this is the case. MSI has stated to PC Gamer that the payments were halted due to the ongoing war in Ukraine, saying: “payments had been put on hold due to the RU/UA war and the economic regulations that entailed.” […] On this being the end for Afterburner, MSI disagrees. “We fully intend to continue with MSI Afterburner,” MSI tells PC Gamer. “MSI have been working on a solution and expect it to be resolved soon.”

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US Sets 2024 Deadline For 5G Signal Safeguards On Aircraft

US aviation safety regulators intend to require passenger and cargo aircraft to meet requirements by early next year for navigation gear to deal with potentially unsafe interference from 5G mobile-phone signals. Bloomberg reports: The equipment is needed because the newer wireless signals are on frequencies near those used by planes’ radio altimeters, which determine altitude over ground and can cause them to malfunction, the Federal Aviation Administration has found. Wireless companies are eager for a solution because they paid the government more than $80 billion for the new airwaves. The changes would need to be made by Feb. 1, 2024, the agency said in a notice (PDF) Monday.

The FAA said it couldn’t rule out interference from 5G signals for about 100 incidents of aircraft navigation equipment issuing erroneous data. Such situations will increase as telecommunications providers expand 5G coverage throughout the US, the FAA said. […] The FAA estimates that out of 7,993 US-registered aircraft that would need revisions, approximately 180 would require radio altimeter replacements and 820 would require the addition of filters to comply with the proposed order, at an estimated cost of as much as $26 million.

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