In the United States, federal regulators said that the founder of a student financial assistance company, Frank, committed fraudulent actions against one of the largest banks in the country.

Source: motionarray.com

The Securities and Exchange Commission (SEC) on Tuesday, April 4, filed fraud charges against Charlie Javis. These charges are related to the sale of Frank JPMorgan Chase in 2021. The transaction value was $175 million.

The SEC claims that during negotiations on the sale of the company to Charlie Javis, to increase the level of attractiveness Frank decided to resort to deception. She, pursuing selfish goals, informed the management of the financial institution that the firm has access to a database containing information about 4.25 million students. The company had the data of less than 300 thousand people. As a result, JPMorgan Chase decided on the transaction, focusing on false information that significantly embellished the real state of affairs.

Gurbir S. Grewal, director of the SEC’s Enforcement Division, said that instead of helping students, Ms. Javis became a participant in a fraudulent scheme. He noted that the defendant invented the company’s success in allegedly helping several million students, and used this fiction for her financial interests.

The Justice Department has charged Charlie Javis with bank fraud, wire fraud, and securities fraud. If the court finds the guilt proven, a decision may be made on the penalty in the form of imprisonment for 10 years.

US Attorney Damian Williams says that representatives of the business community should take these proceedings as a signal that lies to promote a business will be exposed and those for whom greed means more than the law will be held responsible for the deception.

The SEC alleges that Charlie Javis provided false information several times to attract attention from the bank. When J.P. Morgan requested customer data, she asked the Director of Engineering to process the information in such a way that statements about the alleged 4.25 million customers received documented confirmation. In response to this request, a refusal followed. Then Charlie Javis provided the data science professor with a monetary reward for creating custom data that helped close the deal.

In January of this year, Ms. Javis, for the same reason, became a defendant in a civil lawsuit by J.P. Morgan. The banking giant closed Frank in early 2023 and claimed misrepresentation of information about the company’s performance.

Charlie Javis’ lawyers claim that the bank did not show due care when concluding the transaction, choosing the speed of action as a priority, rather than attentiveness. They also state that the financial institution has launched an internal investigation to create a pretext for firing their client and refusing to pay her a retention bonus.

As we have reported earlier, SEC Votes for Accounting Errors to Cost Executives Their Bonuses.