: SEC charges Frank founder with ‘old school fraud’ after JPMorgan fake account scandal

The Securities and Exchange Commission charged Charlie Javice with fraud in connection with the $175 million sale of her student-loan assistance company Frank to JPMorgan Chase JPM . The SEC alleges that Javice misled JPMorgan into believing her company had 4.25 million customers, when it had fewer than 300,000. Javice received $9.7 million in stock proceeds and a $20 million retention bonus, among other compensation, following the sale. “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 SEC enforcement chief Gurbir Grewal, in a statement. JPMorgan made similar allegations in a January lawsuit. Javice sued the bank as well, alleging the bank commenced groundless investigations and manufactured a for-cause termination to deny her millions in compensation.

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