The US regulators are reportedly looking into financial services company JPMorgan Chase & Co’s due diligence on several of its past acquisitions, according to a Financial Times report.
The Office of the Comptroller of the Currency (OCC) has launched a specific audit of the bank’s deal-making after its acquisition of dozens of smaller companies between 2021 and 2022.
The news follows the US government filing criminal charges on Charlie Javice, the founder of the currently closed student financial support company Frank.
Charlie was accused by the US Securities and Exchange Commission (SEC) of defrauding JPMorgan into buying the startup for $175m in September 2021.
Also, the Department of Justice was charged with repeatedly lying to the bank, saying that Frank had up to 4.25 million student customers, but had only about 300,000.
In December last year, JPMorgan filed a lawsuit against Javice and Olivier Amar, Frank’s chief growth officer, in Delaware federal court, and closed Frank in the next month.
The company said that Frank provided largely fabricated data, and alleged that Javice paid a data science professor $18,000 for listing more than 4 million fake student names.
In February, Javice filed counterclaims accusing JPMorgan of compromising her reputation and wrongfully withholding $28m of retention payments and equity.
Earlier this month, federal prosecutors in Manhattan charged Javice with wire fraud that affected a financial institution, along with securities fraud, bank fraud and conspiracy.
The OCC audit was scheduled before JPMorgan’s lawsuit in Delaware federal court.
Last month, JPMorgan has signed a definitive agreement to acquire Aumni, a provider of investment analytics software for the venture capital industry, for an undisclosed sum.
Established in 2018, Aumni developed a cloud-based, global technology platform that offers portfolio monitoring and market analytics to private market investors.
