JPMorgan Chase’s due diligence on a recent flurry of acquisitions is being scrutinised by US regulators in a review that includes a $175mn deal with a founder of a start-up who was criminally charged this week with defrauding the bank.
The Office of the Comptroller of the Currency, which supervises national banks, scheduled a specific audit of JPMorgan’s deal making after the bank bought dozens of smaller companies in 2021 and 2022, according to people familiar with the matter. One of them was student financial aid start-up Frank. Its founder Charlie Javice has been charged with conspiracy to commit bank, wire and securities fraud.
The charges come four months after JPMorgan filed a civil lawsuit alleging that Javice, 31, told the bank that Frank had 4.25mn customers when in fact it had only 300,000. She stood to make $45mn from the sale of the company, prosecutors have said.