Free Video Downloader

Fast and free all in one video downloader

For Example: https://www.youtube.com/watch?v=OLCJYT5y8Bo

1

Copy shareable video URL

2

Paste it into the field

3

Click to download button


SEC charges founder of financial aid startup Frank with defrauding JPMorgan
April 5, 2023

SEC charges founder of financial aid startup Frank with defrauding JPMorgan

Reading Time: 2 minutes

The U.S. Securities and Exchange Commission has charged Charlie Javice, the founder of student financial aid startup Frank, with fraud in connection with the $175 million sale of the company to JPMorgan Chase Bank in 2021. 

JPMorgan filed a lawsuit against Javice in December, alleging that she had helped ‘fake millions of customers in order to induce the bank to buy her company.’ That charge is the root of the SEC’s complaint today, which charges that Javice ‘made numerous misrepresentations’ about Frank’s purported millions of users to entice JPMorgan.

The complaint alleges that as talks between the two parties progressed, JPMorgan pressed Frank executives for data associated with its customers. Javice allegedly sought the help of Frank’s director of engineering to generate synthetic data to make it appear as if Frank had 4.25 million customers. And when that director refused to cooperate, Javice then allegedly paid a data science professor $18,000 to manufacture the data ‘required to close the deal.’ The young entrepreneur denies those claims and in turn filed her own suit against the bank, charging that the bank had let her go in November ‘in bad faith.’

For its part, JPMorgan claims that it found out about the alleged fraud when it sent out marketing test emails to a list of Frank’s customers provided by the company and more than 70% of them bounced back. 

As part of the acquisition, Javice reportedly received $9.7 million directly in stock proceeds, millions more indirectly through trusts as well as a contract entitling her to a $20 million retention bonus as a new employee of JPMorgan Chase.

‘Rather than help students, we allege that Ms. Javice engaged in an old school fraud: she lied about Frank’s success in helping millions of students navigate the college financial aid process by making up data to support her claims, and then used that fake information to induce JPMC to enter into a $175 million transaction,’ said Gurbir S. Grewal, director of the SEC’s division of enforcement, in a written statement. ‘Even non-public, early-stage companies must be truthful in their representations, and when they fall short we will hold them accountable as in this case.’

The complaint, filed in U.S. District Court for the Southern District of New York, charges Javice with violating the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934. The complaint also names trusts held by Javice as relief defendants. The SEC seeks injunctive relief, an officer and director bar, disgorgement and prejudgment interest thereon, and civil penalties.

Since the lawsuit was filed, there has been a lot of back-and-forth between the two parties. JPMorgan Chase has since described the acquisition as ‘a huge mistake.’ In January, the bank shut down Frank’s website. And in March, Javice filed a counterclaim, saying it was ‘implausible’ that JP Morgan ‘was led to believe Frank had 4.25 million registered users when its website publicly claimed the company had helped more than 350,000 people access financial aid.’ She also claims that the bank could not have been misled about the business, pointing to due diligence materials and valuation data.

Reference: https://techcrunch.com/2023/04/04/sec-charges-founder-of-financial-aid-startup-frank-with-defrauding-jpmorgan/

Ref: techcrunch

MediaDownloader.net -> Free Online Video Downloader, Download Any Video From YouTube, VK, Vimeo, Twitter, Twitch, Tumblr, Tiktok, Telegram, TED, Streamable, Soundcloud, Snapchat, Share, Rumble, Reddit, PuhuTV, Pinterest, Periscope, Ok.ru, MxTakatak, Mixcloud, Mashable, LinkedIn, Likee, Kwai, Izlesene, Instagram, Imgur, IMDB, Ifunny, Gaana, Flickr, Febspot, Facebook, ESPN, Douyin, Dailymotion, Buzzfeed, BluTV, Blogger, Bitchute, Bilibili, Bandcamp, Akıllı, 9GAG

Leave a Reply

Your email address will not be published. Required fields are marked *