Press Release

SEC Charges Founder of Frank with Fraud in Connection with $175 Million Sale of Student Loan Assistance Company

For Immediate Release


Washington D.C., April 4, 2023 —

The Securities and Exchange Commission today charged Charlie Javice, the founder of the now shuttered student loan assistance company previously known as Frank, with fraud in connection with the $175 million sale of the company to JPMorgan Chase Bank, N.A., (JPMC) in 2021. The SEC’s complaint alleges that Javice orchestrated a scheme to deceive JPMC into believing that Frank had access to valuable data on 4.25 million students who used Frank’s service when in reality the number was less than 300,000.

The SEC’s complaint alleges that Javice made numerous misrepresentations about Frank’s purported millions of users to entice JPMC. As negotiations progressed, JPMC pressed the Frank executives for the data associated with its customers, and Javice allegedly sought the help of Frank’s director of engineering to generate synthetic data to make it appear as if Frank had 4.25 million customers. When the director refused to comply, Javice allegedly paid a data science professor to manufacture the data required to close the deal with JPMC.

The SEC’s investigation shows that, as a result of the eventual $175 million acquisition of Frank, Javice received $9.7 million directly in stock proceeds, millions more indirectly through trusts, and a contract entitling her to a $20 million retention bonus as a new employee of JPMC.

"Rather than help students, we allege that Ms. Javice engaged in an old school fraud: she lied about Frank’s success in helping millions of students navigate the college financial aid process by making up data to support her claims, and then used that fake information to induce JPMC to enter into a $175 million transaction," said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. "Even non-public, early-stage companies must be truthful in their representations, and when they fall short we will hold them accountable as in this case."

The complaint, filed in U.S. District Court for the Southern District of New York, charges Javice with violating the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934. The complaint also names trusts held by Javice as relief defendants. The SEC seeks injunctive relief, an officer and director bar, disgorgement and prejudgment interest thereon, and civil penalties.

The SEC’s investigation was conducted by Wesley Wintermyer and Lindsay S. Moilanen and supervised by Tejal D. Shah. The litigation is being handled by Nancy Brown, Mr. Wintermyer, and Ms. Moilanen. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, which announced a parallel, criminal investigation today, as well as the Federal Bureau of Investigation.


Last Reviewed or Updated: April 4, 2023