Charlie Javice, the founder of fintech startup Frank, has been found guilty of defrauding JPMorgan Chase in a $175 million case. The U.S. court convicted her after evidence showed she misrepresented the company's customer data to secure the acquisition deal.
Frank, a platform designed to simplify student loan applications, was bought by JPMorgan Chase in 2021. However, the bank later discovered that the startup's user base was significantly inflated. Prosecutors presented proof that Javice manipulated records to make it appear as though Frank had millions of users when, in reality, the numbers were much lower.
During the trial, the prosecution argued that Javice knowingly provided false data to JPMorgan to make the company look more valuable. The court's decision marks a significant moment in financial fraud cases, reinforcing the importance of transparency in tech acquisitions.
Javice now faces serious legal consequences, including possible prison time and financial penalties. The case has raised concerns in the fintech sector, urging investors to conduct deeper due diligence before making major acquisitions.