Days after JPMorgan Chase put her on administrative leave in September, Charlie Javice, the founder of the college-aid site Frank — which JPMorgan acquired in 2021 — moved her money out of JPMorgan accounts because she “no longer wanted to bank with an entity that was retaliating against her,” she said in a Friday court filing seen by Bloomberg.
But the bank to which Javice transferred her money — Signature — would soon find itself in a different sort of trouble.
“As it happened, that timing was ill-fated,” Javice’s lawyer said, according to the wire service.
New York’s Department of Financial Services closed Signature in March after a number of the bank’s business customers, concerned over the Federal Deposit Insurance Corp.’s $250,000 deposit insurance cap, pulled their deposits in what may have been a ripple effect from the failure of Silicon Valley Bank two days earlier.
Javice told the U.S. District Court for the District of Delaware on Friday that she was able to withdraw her money from Signature and deposit it in other “major domestic institutions.”
However, federal prosecutors seized Javice’s accounts this month when she was charged with fraud. The Securities and Exchange Commission, for one, has alleged Javice exaggerated Frank’s user base in an attempt to entice JPMorgan into a deal worth $175 million, as a competitor bank was also allegedly pursuing the startup. JPMorgan sued Javice on similar grounds in December. Javice, for her part, sued JPMorgan, alleging the bank launched an internal investigation of the Frank deal and then fired her to get out of paying her a $20 million retention bonus.
“Whatever argument JPMC might have had for discovery to prevent asset dissipation is now moot,” Javice said, according to Bloomberg.
JPMorgan declined to comment Monday to the wire service.
JPMorgan had inferred in an earlier court filing that Javice sought to hide her assets in three Nevada shell companies that held her Signature accounts.