JPMorgan, Charlie Javice Case Takes Center Stage In Court This Week: Report

Charlie Javice, the founder of student loan start-up Frank, is reportedly standing trial this week for allegedly defrauding JP Morgan Chase & Co. JPM in a $175 million acquisition deal.

Her defense team claims that the bank is using its influence over prosecutors to turn a commercial dispute into a criminal case, The Financial Times reports.

Javice was arrested in 2023 for fraud, accused of misleading JPMorgan into believing her company had 4.25 million users, when it had only about 10% of that number.

In 2021, JPMorgan paid $175 million for Frank, a company designed to help students apply for financial aid. Javice and her co-defendant, Olivier Amar, are accused of hiring a data scientist to falsify user numbers, the report adds.

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This trial has drawn attention to JPMorgan’s decision, which CEO Jamie Dimon called a “huge mistake,” despite the bank’s massive profits, The Financial Times adds.

The case has parallels to other high-profile fraud cases, such as Elizabeth Holmes and Sam Bankman-Fried.

The prosecution also noted that Javice had previously discussed convicted fraudsters like Holmes with her co-defendant, reflecting her awareness of the consequences.

Javice’s defense may focus on a distinction about what counts as a “signed up” student, and the trial is expected to last four weeks.

Price Action: JPM shares are trading higher by 0.89% to $279.06 at last check Tuesday.

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