JPMorgan Chase & Co.
JPM,
is seeking an insurance claim to collect up to about 20% of the $175 million it spent to buy student loan assistance company Frank, The Financial Times reported Wednesday. The insurance claim comes after JPMorgan filed suit in January against Charlie Javice, who founded Frank, for allegedly making up a list of about 4.3 million student accounts when it only had about 300,000. Javice has since been charged with fraud. Dimon said the deal turned out to be a “huge mistake” when he was asked about it on the company’s Jan. 13 call with analysts. Citing people familiar with the bank, the Financial Times report said JPMorgan plans to recover money it spent on the deal through representations and warranties insurance, which typically pays out 10% to 20% of a purchase price or up to $35 million in the case of the Frank deal. JPMorgan’s policy covers cases of fraud and the bank has filed a claim, a source told the newspaper. JPMorgan Chase stock is up 0.2% in premarket trades on Wednesday.
