The U.S. Securities and Exchange Commission on Tuesday sued Charlie Javice, the founder of the Frank college financial planning platform, accusing her of defrauding JPMorgan Chase & Co into buying her startup for $175 million in 2021.
In a complaint filed in Manhattan federal court, the SEC said JPMorgan was enticed by Javice's repeated claims that she had lined up 4.25 million student customers, when in fact she had data for only about 300,000 students.
The SEC said Javice concocted a sham list of real names that they passed off as Frank customers, and that JPMorgan discovered the con when marketing materials it sent to some of those people reached only a few intended recipients.
A lawyer for Javice could not immediately be reached for comment. An attorney for Javice in January denied similar allegations.
JPMorgan did not immediately respond to requests for comment. The bank shut down Frank in January, after suing Javice the previous month.