Editor’s Digest: JPMorgan Chase Takes Legal Action Against Convicted Fintech Executives
In a recent turn of events, US-based banking giant JPMorgan Chase has filed a request in court to be absolved of its obligation to cover the legal fees for Charlie Javice and Olivier Amar, two executives convicted of defrauding the bank. This surprising development stems from JPMorgan’s acquisition of Frank, a failed fintech start-up co-founded by Javice and Amar.
Claims of “Clear Abuse”
The bank’s filing on Friday alleges what it refers to as “clear abuse” by Javice and Amar. It cites the “unreasonable” sums of money demanded for their legal defenses, approximately $115mn, of which $60.1mn was advanced to Javice and $55.2mn to Amar. JPMorgan asserts that Javice engaged five law firms for her defense, a legal team that has remained intact even after her conviction in March for defrauding the bank.
One of the law firms representing Amar reportedly received advanced fees and expenses totaling $53.9mn, according to JPMorgan. Javice was sentenced to seven years in prison last month, and was ordered to pay restitution to JPMorgan of $288mn, inclusive of legal fees, and forfeit an additional $22mn. Amar, convicted of fraud as well, awaits sentencing. Javice has petitioned the court to reduce the restitution award, a move staunchly opposed by JPMorgan and the Department of Justice.
Obligation to Cover Legal Fees
Despite these developments, JPMorgan is bound by an agreement to cover Javice and Amar’s legal fees. This agreement was part of the deal when the bank purchased their student finance company, Frank, in 2021. However, JPMorgan argues in its filing that “the fees and expenses to fund Javice’s criminal defense have far exceeded any reasonable amount for the defense of the entire case” and that she continues “to utilize all five law firms in connection with post-conviction proceedings” unnecessarily.
Representatives for Javice and Amar have yet to respond to requests for comment. Although the sums involved might seem minor for JPMorgan, which generated more than $1bn a week in profits in 2024, this dispute serves as a reminder of the bank’s ill-fated acquisition.
The Ill-Fated Acquisition of Frank
JPMorgan purchased Javice’s company for $175mn, only to soon discover that the business had but a small fraction of the 4mn users that she had claimed during the sale process. The bank alleges that Javice and Amar had hired a data scientist to fabricate millions of users at the time of the company’s sale. This event has become a significant part of JPMorgan’s contention in the current legal dispute.
For more details, you can access the original report Here.
