On Friday, the Financial Times reported that JP Morgan and Chase is undergoing reviews by US regulators over the due diligence the bank performed on a number of past acquisitions. The report cited people familiar with the matter.

The bank’s purchases of dozens of smaller companies in 2021 and 2022 are all undergoing a targeted audit being performed by the Office of the Comptroller of the Currency (OCC) in the US.

The audits follow the criminal charges being filed by the US government against Charlie Javice, who has been accused of defrauding JPMorgan Chase during the acquisition of the financial services company she founded, named Frank. According to the allegations, she paid a data science professor $18,000 to fabricate 4 million names of users of the website, to convince JPMorgan to purchase it for $175 million in 2021.

The Department of Justice charged Javice, 31, with wire fraud affecting a financial institution, securities fraud, bank fraud, and conspiracy, alleging she lied to JPMorgan, claiming Frank had 4.25 million student customers, when of the names provided, only 300,000 were legitimate customers, while almost 4 million were names generated by the data-scientist she hired for that purpose.

In a Delaware federal court in December JPMorgan sued Javice and her company’s chief growth officer, Olivier Amar.

According to the report, JPMorgan filed the lawsuit after the OCC scheduled its audit.

In February, Javice countersued, claiming JPMorgan “compromised her reputation,” and has wrongly denied her $28 million in retention payments and equity.

JPMorgan shuttered Frank in January, and the acquisition was branded a “huge mistake” by CEO Jamie Dimon in a Jan 13th conference call with analysts.

Neither the OCC nor JPMorgan have commented publicly on the audits.

Verified by MonsterInsights