JPMorgan Asks for Permission to Question Frank Founder About Transfers

JPMorgan Chase wants to question Frank founder Charlie Javice about transfers of millions of dollars.

In a court case in which the bank is suing Javice for fraud, JPMorgan Chase has asked a judge for permission to question her under oath about transfers of money to a company she allegedly set up, Bloomberg reported Thursday (April 13).

The bank said in a Tuesday (April 11) court filing that the transfers took place shortly after JPMorgan discovered Javice’s fraud and that the corporation to which she transferred the money is in a state — Nevada — that is often used by individuals who want to hide their ownership information, the report said.

Javice has denied JPMorgan’s claims of fraud, is countersuing the bank and has said that the bank launched its internal investigation as a pretext to prevent her from getting a $20 million retention bonus, per the report.

JPMorgan brought the lawsuit in January, saying that it was defrauded when it bought Frank, the college financial planning platform founded by Javice, because Javice and another Frank executive, Olivier Amar, inflated the number of customers who were using the platform.

The bank alleges that Javice and Amar had someone create millions of fake accounts in order to mislead the bank as it was considering making the deal.

Lawyers for Javice said in response to the lawsuit that JPMorgan Chase didn’t perform due diligence, rushed into the deal and launched its internal investigation of the deal in order to fire her and deny her a retention bonus.

Both the bank and the Frank founder are reportedly facing federal regulators as well.

On April 4, the Securities and Exchange Commission (SEC) charged Javice with fraud in connection with the sale of Frank. According to the SEC, she carried out a scheme to dupe JPMorgan Chase into thinking Frank had access to data on 4.25 million students who used its service, though the true number was below 300,000.

Three days later, on April 7, the Financial Times reported that the Office of the Comptroller of the Currency (OCC) is looking into JPMorgan Chase’s due diligence on recent acquisitions, including Frank.