Morning Coffee: JPMorgan paid a 29-year-old $22m and she must pay $144m in return. M&A boom extends hiring optimism
Let this be a lesson to anyone who would sell their fintech firm to JPMorgan while exaggerating its success.
Yesterday, the fall from grace of Charlie Javice was complete. After selling her student-focused fintech firm Frank to JPMorgan for $175m four years ago, Javice was compelled to return the money to JPMorgan, with costs, and will be incarcerated for seven years.
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Business Insider says Javice herself only made $22m from the 2021 sale, including her share of the company, plus salary, bonuses and a year's salary. Together with her business partner, Olivier Amar, she must repay $288m, which includes the $175m share price plus JPMorgan's legal fees. That's $144m from Javice herself, now aged 33, once she gets out of prison.
Her crime was to tell JPMorgan that Frank had 4m users, when in fact it had closer to 300,000. JPMorgan wanted to sell its own products to Frank's users and thought it could generate $500m revenues from doing so. This wasn't possible. It wanted vengeance.
Javice's fate could have been worse. At one point, there was talk of 30 years in prison, but the judge appeared to take pity on her. Javice was a "good person" who had done "good deeds," he declared. Lawyers for Javice argued that she'd led an "exemplary life" which wasn't driven by greed and noted that she hadn't spent her $21m on "lavish lifestyles, Ferraris, yachts, private jets [or] jet-setting across the world.” She's seemingly just been hanging out in Miami Beach.
Clutching a handful of tissues in court, the Wall Street Journal reported that Javice lamented: “At 28, I did something that goes against the grain of my upbringing... Not a day goes by that I do not feel profound remorse. I am deeply sorry, and I am asking with all my heart for forgiveness.”
This seemed to work. It probably helped that Javice has supporters like the Apollo CEO Marc Rowan, who urged the judge to be lenient based on all the "meaningful contributions to society" she will be making "moving forward."
"I don't think you will be committing any crimes, and I think you will be devoting your life to service," the judge concluded of Javice. "But others need to be deterred."
JPMorgan is presumably pleased with the outcome. Its lawyers had argued that Javice intentionally created fraudulent data about her users. Jamie Dimon had taken a personal interest in the Frank purchase and reportedly told Javice the bank should "get the deal done." Javice subsequently argued she was being punished as a way for Dimon and JPMorgan to save face. Her lawyers argued that JPMorgan should have known the Frank user numbers were based on synthetic data and noted that other companies, like Capital One, had done more thorough due diligence and then passed on the purchase.
Separately, enthusiasm is growing for the recruitment of M&A bankers. “We’re entering a bit of a boom,” one headhunter who recruits senior people told Financial News. “I’m speaking to senior bankers who are planning 20 or 30 managing director hires over the next 12 months. This is pretty typical across the street.”
Meanwhile...
Jefferies just had its best quarter ever for M&A revenues as deal activity picked up and market conditions improved. (Bloomberg)
Jefferies hired Massimo Saletti from JPMorgan as joint global head of real estate, gaming and lodging investment banking. He'll be based in London. (Bloomberg)
HSBC's chair, Mark Tucker, is stepping down today and it doesn't have a new one. “You can’t have an interim chair for very long. It’s a stick of dynamite underneath everyone.” (Financial Times)
Ann Watson at Citi allegedly said it was a “nightmare” to work with Indians during a job interview. Yesterday a court decided she was dismissed lawfully as a result. Watson said she couldn't remember saying it because of the menopause. (Bloomberg)
It's a fine year to be a precious metals trader in a bank. Coalition Greenwich says precious metals trading revenues at the top 12 investment banks increased more than 60% year-on-year to more than US$1bn in the first half of 2025. (IFR)
Low latency trading firms are competing with hedge funds engaged in statistical arbitrage. “It’s easier to go from building a Ferrari to building a Volkswagen, than from building a Volkswagen to a Ferrari.” (Financial Times)
Consulting revenues at Deloitte fell 10%. “Geopolitics and continued economic headwinds meant that many organisations have been carefully managing their costs and delaying certain investments.” (Financial Times)
Moelis & Co. hired Matt Singer from BlackRock to focus on private placements by high-growth public companies and private credit. (Bloomberg)
Brevan Howard hired Terence Hsu from BlueCrest. (Financial News)
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