News

JPMorgan to Pay Frank Founder’s Legal Fees

J.P. Morgan Chase will pay the legal costs of the disgraced founder of the fintech company with whom it is suing.

JPMorgan to Pay Frank Founder’s Legal Fees

Source: Pixabay.com

The financial institution’s obligation to pay court costs was approved by the court last Monday, May 8. This court decision was made as part of the proceedings between one of the world’s largest banks and Charlie Javis, accused of involvement in fraudulent actions by the founder of the financial planning platform Frank.

The text of the court order states that J.P. Morgan is obligated to cover the legal costs of Charlie Javis as part of an agreement to sell her platform to a financial institution in 2021.

J.P. Morgan initiated legal proceedings on the acquisition of Frank in January of this year. The financial institution claims that this transaction was concluded and implemented as a result of the use of deceptive practices. The bank said that the decision to purchase the platform was made after receiving information that the number of its users is more than 4 million people, although, as it turned out later, Frank actually had 300 thousand customers. The financial institution claims that Charlie Javis and another representative of the company’s management deliberately distorted information about the number of users in their commercial interests.

The text of the lawsuit filed by the bank says that the founder of the platform instructed a certain specialist to create several million fake accounts. The bank claims that because of this, the decision to purchase Frank was made taking into account false information. Charlie Javis received $175 million as a result of the transaction, which, according to J.P. Morgan, she would not get without the use of fraudulent practices.

Charlie Javis’ lawyers claim that the bank did not show due diligence when concluding the transaction, rushed to make the final decision, and launched an internal investigation to deny their client a retention bonus.

In April, the Ministry of Justice charged the founder of Frank with bank fraud, fraud with electronic transfers, and securities. If proven guilty, Charlie Javis will spend several decades in prison. The Securities and Exchange Commission also filed charges of involvement in fraudulent activities.

In April, Gurbir S. Grewal, director of the SEC’s enforcement division, said that Ms. Javis lied about the success of the platform in helping millions of students receive financial assistance, made up alleged confirmations of her words, and used fake data to obtain $175 million as part of a deal with J.P. Morgan.

Last month, it also became known that J.P. Morgan asked permission to interrogate Charlie Javis under oath about money transfers to the company she created. The bank claims that these operations were carried out shortly after the discovery of the alleged fraud, and states that the funds were transferred to a corporation based in Nevada and used by individuals to conceal financial information.

Charlie Javis’ lawyers claim that their client does not even have the opportunity to hide his assets, since its were arrested by the government.

Serhii Mikhailov

1904 Posts 0 Comments

Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.