Morning Brew Daily - Another Forbes '30 Under 30' Heads to Trial & DOGE Wants Access to the IRS

Episode Date: February 18, 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

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at pwc.com slash U.S. slash brew AI. That's pwc.com slash us slash brew AI. Good morning Brew Daily show. I'm Neil Fryman. And I'm Toby Howell. Today, Argentina's president is caught in a scandal after

promoting a meme coin that collapsed. Then another 30 under 30 alum is set to stand trial today. Turns out fake it till you make it isn't always the best advice. It's Tuesday February 18th. Let's ride. Welcome back to the short week. I 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, is 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 hooaha 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. Oh, 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. Know you're 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 mb. 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 JPMorgan into buying her fintech company, Frank.

Javis was once celebrated as a rising star in the fintech world and snagged a spot on Forbes's 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 intention of J.P. 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 J.P. Morgan. Not necessarily financially, the price tag was relatively small for a bank of its size, but reputationalally. 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 is so far led to jail time. Yeah, so how did J.P. Morgan find out that these email list 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% of the emails were even delivered and just 1.1% were open. That's according to the lawsuit that JPMorgan 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 us. 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 Diamond, 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 Diamond 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

buyers 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. She says there's plenty of instances of me referring to our user base in the hundreds of thousands, not in the millions. Meanwhile, J.P. Morgan's like, no, we were told that this had this big, robust email list. Once we got it, we learned that a lot of the names on it were synthetic were made up. So is it buyer's remorse or is it criminal fraud? That's what this trial is trying to get at. And you can't help but point out the similarities between Charlie Javis and some of the other Forbes 30 under 30 who are now in their quote, hall of shame. And it seems like the people on Javis's team are fully aware of these comparisons that are going on. A spokesperson

said the only similarities with Holmes is that they are young, good looking, and savvy. That's the only comparison. This is a case of due diligence. J.P. Morgan knew what they were getting into, and buyers remorse once they got it. One thing that is moving against Javis, though, in this case, though, is that Amar, you know, the chief growth officer that worked alongside Javis is, they are trying to do an antagonistic defense,

which means that Amar will likely turn on Javis, which has, Javis was like, can we please be tried separately? Because this person's about to turn on me. However, that is not going to happen here. So that's something that should benefit the prosecutors in this case that these two are not providing a united front. It does look like we're going to see like a he said, she said sort of trial. So we got a four-week trial coming up.

Javis has kind of a powerhouse defense team. Ron Sullivan, Harvard Law Professor, is her co-counsel. He has a reputation for taking on seemingly impossible cases. He secured an acquittal in the double murder case of Aaron Hernandez. Andy also was on Harvey Weinstein's defense team for a bit. So we'll see how this plays out and whether she joins other Forbes Under 30 and being convicted for fraud. How's everyone doing on their taxes?

You make in 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 and 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 Gringot's fault with only a select number of IRS workers allowed in to accomplish a specific unofficial 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? A 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. These are, it's extremely sensitive data. It is, if it falls in the wrong hands, it violates Americans' privacy, but also can be, you know, 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. Zuming out, the IRS has been this lightning rod for discussions and debate about how to modernize its system. It was built on code that was from the 1960s. The Biden administration plugged it with $80 billion to modernize and go after tax cheats who are making over $400,000. Republicans tried to claw that back.

Treasury Secretary Scott Bassett, who leads the IRS, said that he has three goals. It's collections, privacy, and customer service. He said, I don't think there's anyone who, thinks that the IRS has achieved its potential in either of those three? Right. That is something that I think a lot of Americans can get on board with, which is modernizing the IRS. Everyone has dealt with the IRS in some way, shape, or form, and it has not been a pleasant experience. That being said, though, you don't necessarily want someone meddling with these systems, as 150 million taxpayers are, you know, preparing to file their returns. Oh, I'm done.

I know. You over the weekend, you were very, you were bragging to everyone. But the April 15th deadline isn't yet here. And so the fear is not only are they potentially getting access to this data that's very sensitive, but that they could, you know, break these systems as people are trying to file their return. So it is a double whammy of nervousness around Do's infiltrating the IRS right now. The Venn diagram of world leaders who have also messed around with mean coins now contains another name after Argentinian president Javier Meles, dalliance with crypto, landed him in Hollywood. water. Millet promoted a coin called Libra in a post on X on Friday, writing, this is a private

project dedicated to encouraging the growth of the Argentine economy. The coin immediately rocket upwards to eclipse a $4.4 billion market cap before making a rapid unscheduled disassembly and dropping 95% meter hours later. Milet tried to save face by deleting the post, explaining that he was not actually familiar with the details of the project, but the damage was done. Rug pulling a meme coin as a sitting present is tough to ignore, and lawmakers have raised the possibility of an impeachment hearing. Miele also said he was looking into whether any laws were broken, which feels very Tim Robinson wearing a hot dog suit costume meme.

Neil, a tough blow to Mela's credibility just as he was gaining steam for its unconventional approach to remaking Argentina's struggling economy. This is a huge scandal in Argentina, plastered its front pages over the weekend And for a president to be involved in a rugpole meme coin, you expect it for maybe some internet celebrities, Haley Welch or something, but you don't necessarily expect it from a sitting president of a sovereign nation. This was also a massive wipeout. They're 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 Miele'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 in 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 coin 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 kind of filtered through to the rest of the Argentinian stock market investors in Buenos Aires, started dumping a lot of shares in big local companies. Their benchmark index actually saw its biggest intraday drop in roughly, three weeks as, you know, this kind of filtered through the economy. And then I also just mentioned that there's a Venn diagram of world leaders who have also, you know, messed around with crypto. Trump is squarely in the middle of that as well. And, you know, Trump and Mule have kind of been, 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. 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. Own it all. Pay off your home, travel for life, drive a Ferrari. In celebration of the world premiere of the Monopoly, big board buck slot machine by aristocrat gaming, Yamava Resort and Casino at San Manuel is giving one person a $1.6 million dream package. The biggest prize in Yamaba's history. Club Serrano members earn daily instant prizes and secure a spot in the finale May 29th. Don't pass go and own it all.

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Welcome to winners of the long weekend, the segment where Toby and I pick two things that are feeling as refreshed as your co-worker who took a quick trip to the DR. I won the pre-show planking contest, so I get to go first. And my winner is European defense stocks like Saab, B-A-A-C-A-C-A-C. systems, Ryan Medal, which all spiked to record highs yesterday. Defense stocks hitting records, not typically a good sign for your region's security. And that is certainly true for Europe these days. In the past week alone, the Trump administration has left Euro leaders shell-shocked by signaling America was not so interested anymore in defending Ukraine or preserving their decades-long

transatlantic alliance, leaving the Europeans to fend for themselves. What were those signals? The U.S. and Russia will be holding talks in Saudi Arabia this week. about ending the war in Ukraine. Note that Ukraine and European leaders were conspicuously left off the invite list. Then on Friday, Vice President J.D. Vance lambasted European establishment politicians to their faces at a security conference in Munich, leaving no doubt that even if Europe needs America, America will no longer be bothered with Europe. And that means a new era of rearmament is dawning on the continent. Upgrading defense and protecting Ukraine could cost Europe's major powers an additional $3.1 trillion over a decade. But as Poland's prime minister

said yesterday, if Europe fails to spend on defense now, they'll be forced to spend 10 times more if they don't prevent a wider war. Toby, the security architecture that had existed in Europe for decades just got blown up in one week. Yeah, a lot more spending is going to be needed. And that is not me saying it. That is NATO's Secretary General Mark Rutt saying that he said that NATO's spending will have to be considerably more than 3% of GDP where it's been, you know, for 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, you know, the sirens call of just relying on America for all their weapons. And so that is why you are seeing this big, you know, 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% of GDP from all NATO countries going to defense spending in 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%. So you're going to see France, Germany, the UK, all of these countries spend way more on defense. That is boosting shares. And you also saw Treasury yields, not Treasury yields,

that's the United States, 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, actually watched it this weekend.

The reason for our hockey curiosity is a tournament called the Four Nations face-off, 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 final 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 and effort between the two was clear. Neil 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 mid-season exhibition is some tense geopolitics and a willingness to drop the gloves. I can't wait for Thursday night.

You know, that game got 4.4 million viewers on Saturday. I expect this game on Thursday is going to blow it out of the water. Hockey got a lot of deserved praise for changing up their All-Star game format to this four nation's idea. J.J. Watt called it the best idea hockey has had in a long time. And you're right. You can't help but contrast it. with the NBA All-Star game, which happened on the same weekend. They also were not happy with the way the All-Star game was going.

You know, last year, some team put up 200 points, so it seems like the athletes did not care. But in contrast to what hockey did, the NBA got terrible reviews for. They mixed up their weekend a little bit. That included a ton of pauses. There was a Mr. Beast promotion where he gave a fan. $100,000. That may have been the best part of the weekend,

but it was very interesting to compare the two sports leagues and how they tried to rejigger their all-star weekends that had been floundering. One, two, great success, and the other looks like they're going to have to go back to the drawing board. Yeah, it was just a massive boost in viewership as well. Part of it was kind of just a dull sports weekend.

So when we were deciding what to watch on TV, like the NHL was there for a lot of fans, but it was just so entertaining. I mean, you have the geopolitics, obviously of these tariffs that we're trying to apply on Canada. And Canada started booing the American National Anthem. And so just to see all the players just immediately drop gloves. These are teammates, too.

That's what's funny about this, is that a lot of these players play on the same teams. But when it comes to representing their countries, it just goes into another gear. And it's just so apparent when you're watching the product on there. And it got great viewership. I mean, ABC said the game was up 369% versus the current average viewership for NHL games on ABC. Postseason games last year, average 1.5 million viewers. This was four times that level. And you said the final on Boston is going to be, I would assume,

orders of magnitude larger than that as well. So just a big win for hockey. And I'm fully hockey-pilled at this point. 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 Tees 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

home pod, the smart home command center. Maybe it's all four. We'll find out tomorrow. I know. People were, you know, 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 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, could be something completely different. But it was interesting to see, you know, Apple analysts going, newest member of the family. What does that mean? It has to mean something different.

All right. I've waited so long to say this. Spring training is back. Baseball returns to sunny Arizona and Florida this week. as teams kickoff a month of preseason games. This offseason was marked by massive spending by the wealthiest teams to bolster their rosters. The defending champs Dodgers spent more than $450 million

in free agency, while the Mets wrote a $765 million check to Juan Soto, the richest contract in sports history. Until spring training becomes a four nations face off, I'm not watching, Neil. Give me the U.S. versus Dominican Republic versus Cuba versus Japan, I think. That exists. It's the World Baseball Classic. I know, but I want Ford Nation specifically, and I want it now, okay?

You don't understand being a Northeasterner and having it being so cold out, and then you're flipping on the TV to see Grapefruit League in February, and then playing baseball in short-sleeved shirts, and you're like, spring is finally coming. Listen, I understand what it's like to be a Floridian, and see those Northeastern, see those pale people who have been cooped up for months, come down to Florida to watch, so I absolutely know what you're. talking about. Okay, let's wrap it up there. Thanks so much for starting your morning with us and have

a wonderful Tuesday for any questions, comments, or feedback. Send an email to Morningbrood Daily at Morningbrood.com. And if you're enjoying the show, share it with a friend, family member, or coworker. Toby, who should everyone listening share it with today? I want you to share the podcast with someone who you are trying to intercept into becoming a hockey fan. As someone who has recently been incepted, who is on that inception journey, you are doing them a service. Okay. When this Four Nations Cup is over. Let's see how much talk for you watch, okay? Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Yuchinawa Ogu is our technical director. Scoopster Daris is on audio.

Hey now hair and makeup. You're an all star. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.