JPMorgan Chase claims it was duped by a 30-year-old entrepreneur who lied about the number of college students using Frank — a financial planning website the megabank bought for $175 million.
JPMorgan Chase alleges that Charlie Javice, a 2019 Forbes 30 under 30 in finance list, led the bank to believe that Frank was “a company deeply involved in the market segment with 4.265 million customers.” the college age busy”. according to a lawsuit filed Dec. 22.
“Instead, it got a business with fewer than 300,000 customers,” according to the explosives lawsuit filed in federal court in Delaware.
Frank’s supporters include Mark Rowan, the billionaire CEO of Apollo Global Management, who has been listed as the site’s main investor, according to Crunchbase.
The lawsuit alleges that Javice and another Frank executive, Olivier Amar, hired a data scientist who was paid $18,000 to compile a list of fake names and addresses posed as customers. The scientist used computer-generated data to create a fake user base that included information such as client names, dates of birth and colleges they attended, the lawsuit alleges.
Charlie Javice, 30, is being sued by JPMorgan Chase for allegedly lying about the number of customers who signed up on her Frank website before she was acquired by the bank in 2021.LinkedIn/Charlie J
Javice and Amar, who held the role of chief growth officer, reportedly received $26 million as a result of the bank’s acquisition of Frank — money that JPMorgan said “they would not have received had it not been for their wrongdoing.”
Frank marketed himself as a website that makes it easy for prospective college students to fill out federal grant forms.
JPMorgan claimed that when Javice approached the bank about a possible acquisition in the summer of 2021, it greatly inflated the number of customers who had used the site.
Javice and another Frank executive, Olivier Amar, allegedly paid a data scientist $18,000 to create a list of fake customers
“Instead of revealing the truth, Javice pushed back at first [JPMorgan’s] request, arguing that she could not share her client list for privacy reasons,” the bank said in its legal filing.
“After [JPMorgan] insisted Javice chose to invent millions of Frank customer accounts out of one piece of cloth.”
Days after JPMorgan filed its lawsuit, Javice countered, claiming that the bank owed it millions of dollars in legal fees, accumulated as a result of an internal investigation last spring.
Javice claims she was fired from her position as head of Student Solutions by the investment bank in November. She claims she was fired from JPMorgan to avoid a $20 million bonus payment owed to her.
Her attorney, Alex Spiro, claimed that JPMorgan’s lawsuit was “nothing but a cover”.
JPMorgan acquired Frank, a website designed to help college students apply for financial aid, for $175 million in 2021.Frank
“After JPM rushed to acquire Charlie’s rocket business, JPM realized they could not circumvent existing student privacy laws, committed misconduct, and then attempted to reverse the deal,” Spiro told the Post in an email.
“Charlie whistled and then complained.”
Spiro also represented Elon Musk in his lawsuit alleging that Twitter misrepresented the number of user accounts on its platform when Musk agreed to buy the company for $44 billion last year.
Javice has deactivated her Twitter account.Twitter
A JPMorgan spokesman scoffed at Spiro’s claims, telling the Post that Javice “was not and is not a whistleblower.”
“Our legal claims against Ms Javice and Mr Amar are set out in our complaint along with key facts,” the spokesman said.
Javice and Amar both deleted their Twitter accounts. They were not immediately available for comment.
In a 40 under 40 profile from Crain’s New York Business, Javice compared Frank to a website that does for student loans what TurboTax does for the 1040 form.
Javice said she was inspired to start Frank after cobbling together scholarships, help and help from family to attend the prestigious Wharton School at the University of Pennsylvania.