Charlie Javice’s sentencing could play a key role in the dealmaking renaissance

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In today’s big story, fintech wunderkind Charlie Javice didn’t get much leniency on her prison sentence. That could say a lot about future deals in the space.

What’s on deck:

Markets: How to cash in on M&A’s revival.

Tech: The AI meant to save people time at work is sometimes creating even more headaches.

Business: Details on Starbucks’ severance package for store managers.

But first, all rise.

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The big story

Doing time

Charlie Javice got in trouble because some of her startup’s customers were fake. She’s now facing some real consequences.

Javice was sentenced to seven years in prison on Monday, the culmination of a fascinating saga between the largest US bank and the founder of a once-buzzy startup it acquired.

It’s significantly more than the 18 months Javice’s legal team had been hoping for. Federal prosecutors, meanwhile, were aiming for a 12-year sentence. Javice could have been sentenced to up to 30 years in prison.

Just a few years ago, Javice and her student financial aid platform, Frank, were the talk of the town en route to accumulating some 4 million users. Eventually, JPMorgan came calling and acquired the startup for $175 million. The bank saw value in pitching Frank’s college-aged user base on its banking products.

The only problem? Frank never had data for more than 300,000 users.

Javice was convicted this March on four counts of defrauding JPMorgan. Following her prison sentence, she will be subject to three years of supervised release. Along with her co-defendant Olivier Ama, Javice must pay $287.5 million in restitution. She also has to forfeit more than $22 million in ill-gotten gains.

Javice’s sentencing could also have some wider implications.

One argument made by Javice’s lawyers was that JPMorgan made a mistake when it was rushing to buy Frank during the frenzied dealmaking days of 2021.

JPMorgan’s due diligence on the deal may have been lacking. But US District Judge Alvin Hellerstein said the victim’s competency doesn’t matter in a case like this.

“A fraud remains a fraud whether you outsmart someone who is smart or someone who is a fool,” Hellerstein said.

The sentencing shows that even when the victim is a banking giant like JPMorgan — who the defense said should have known better — blaming the victim is little help, BI’s Laura Italiano and Jacob Shamsian write.

It’ll be interesting to see how that thinking influences future dealmaking. As M&A starts to ramp up, buyers could be emboldened to cut corners, knowing they have some protection against fraudsters.

Granted, no one wants to find themselves in a situation like JPMorgan was with Frank. But if dealmaking takes off the way it’s expected to, you could see a company caught up in the feeding frenzy willing to overlook some things to get the deal they want.

3 things in markets

EA + LBOs = comeback season. EA is going private as part of a $55 billion leveraged buyout with a consortium of investors. The news caused its stock to spike by 21%. It’s the largest leveraged buyout ever, and the deal could signal an LBO resurgence. Meanwhile, experts are warning that the hiring landscape at investment banks isn’t showing the same signs of revival.

Making the most of the dealmaking renaissance. Even before EA’s colossal LBO, new data from Goldman Sachs showed the value of announced M&A is up 29% year over year. The bank expects a 15% increase in M&A deals in 2026. BI’s Joe Ciolli shared how to adjust your portfolio to capitalize. Goldman also highlighted six stocks it thinks could be M&A targets.

A peek into Wall Street’s future leaders. Goldman Sachs polled about 2,100 summer interns on everything from spending habits to favorite books. Almost 100% said they use AI in their personal lives, although their responses also showed a desire to disconnect and get more face-to-face time.

3 things in tech

We’re drowning in AI slop. Generative AI tools were supposed to make our jobs easier. Instead, they’ve resulted in a lot of slop: stuff that looks like it gets the job done, but is full of errors upon closer inspection. That’s created more work for humans who have to clean it up.

Anthropic’s newest AI model is here. Claude Sonnet 4.5 launched Monday, and Anthropic is calling it the top coding AI system. It claims the new model can operate autonomously for up to 30 hours. See what else Anthropic said it can do.

Amazon Web Services wants to go organic. The company is seeking a more grassroots adoption of its AI apps, without leaning on the sales team. AWS’s Q Developer lags behind its rivals, like Cursor and Windsurf, in organic adoption, according to an internal Amazon document obtained by BI. It highlights how the dynamics have shifted for AWS in the age of AI.

3 things in business

Starbucks is offering up to 26 weeks of severance for managers of closing stores. The company, which is closing 1% of its North American stores, detailed its severance offerings in a document viewed by BI. Retail workers generally don’t get severance payments, though there have been exceptions.

Want to work for MrBeast? Pack your bags for college-town life. Greenville, North Carolina, isn’t just MrBeast’s hometown — it’s the headquarters of his YouTube empire. Media workers often give up the big city life to work for YouTube’s top star, but moving to the college town isn’t for everyone. That’s why some new hires get a “vibe check” period.

Marissa Mayer’s AI startup is dissolving and being bought by … Marissa Mayer’s new AI startup. Mayer’s photo-sharing app Shine never really caught on, and now it looks like she’s pivoting to the crowded field of AI personal assistants. BI’s Katie Notopoulos mourns the Shine that could’ve been.

In other news

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Retailers are using police-style bodycams to deal with crime, but this company wants its latest AI-powered tech to do more.

What’s happening today

• Nike reports earnings.
• Consumer confidence index updates released.
• AOL dial-up is officially discontinued.
• It’s the end of the US fiscal year.

Dan DeFrancesco, deputy executive editor and anchor, in New York. Meghan Morris, bureau chief, in Singapore. Akin Oyedele, deputy editor, in New York. Grace Lett, editor, in New York. Amanda Yen, associate editor, in New York.

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