Millennial app founder arrested, charged with defrauding JPMorgan Chase | CNN Business

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Charlie Javice, founder of the buzzy student financial assistance startup Frank, was arrested Monday night and charged by the US Securities and Exchange Commission for allegedly defrauding JPMorgan Chase in the $175 million acquisition of her company

The SEC said in a complaint filed to a New York District Court that Javice led JPMorgan Chase to believe that Frank had 4.25 million users, when it in reality had fewer than 300,000. The ensuing SEC investigation alleges that Javice took in “$9.7 million directly in stock proceeds, millions more indirectly through trusts, and a contract entitling her to a $20 million retention bonus” through the 2021 sale of her company. “Ms.

Grewal, director of the SEC’s Division of Enforcement, said in a statement. Javice was arrested Monday night in New Jersey on counts related to the same deal. She is charged with one count of conspiracy to commit banking and wire fraud, one count of wire fraud, one count of bank fraud and one count of securities fraud. If convicted, each count carries a sentence that could mean decades in prison. She is expected to appear in court Tuesday.

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