A JP Morgan acquisition of US$175 million ended up in Delaware courts after the bank discovered the company's 4 million user base was a sham.
The case is not unique in history and reinforces the importance of the due diligence stage in any investment.
Good due diligence goes beyond simply analyzing financial statements, requiring the triangulation of financial, operational, and even tax data to minimize the risk of fraud and unpleasant surprises after the transaction is completed.


