SEC accuses Frank founder of ‘old-school fraud’ after JPMorgan fake account scandal

Published: April 4, 2023 10:43 am ET

The Securities and Exchange Commission charged Charlie Javis with fraud in connection with the $175 million sale of his student-loan assistance firm Frank to JPMorgan Chase JPM.

The SEC alleges that Javis led JPMorgan to believe his firm had 4.25 million clients when it actually had fewer than 300,000 clients. Javis received $9.7 million in stock proceeds and a $20 million retention bonus, among other compensation, following the sale.

“Instead…

The Securities and Exchange Commission charged Charlie Javis with fraud in connection with the $175 million sale of his student-loan assistance firm Frank to JPMorgan Chase.

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The SEC alleges that Javis led JPMorgan to believe his firm had 4.25 million clients when it actually had fewer than 300,000 clients. Javis received $9.7 million in stock proceeds and a $20 million retention bonus, among other compensation, following the sale.

“Instead of helping students, we allege that Ms. Javis engaged in an old-school fraud: She lied about Frank’s success in helping millions of students navigate the college financial aid process, prompting JPMC to engage in a $175 million transaction,” SEC Enforcement Chief Gurbir Grewal said in a statement.

JPMorgan made similar allegations in a lawsuit in January.

Javis also sued the bank, alleging the bank launched a baseless investigation and denied him millions in compensation for cause.

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