JPMorgan Chase claims it was duped by a 30-year-old entrepreneur who lied about the number of college kids who were using Frank — a financial-planning site that the mega-bank bought for $175 million.
JPMorgan Chase alleges that Charlie Javice, who was featured on the Forbes “30 under 30” list in finance for 2019, led the bank to believe that Frank “was a business deeply engaged with the college-aged market segment with 4.265 million customers,” according to a lawsuit filed on Dec. 22, read.
“Instead, it received a business with fewer than 300,000 customers,” according to the explosive suit filed in federal court in Delaware.
Among Frank’s backers are Mark Rowan, the billionaire CEO of Apollo Global Management who was listed as the site’s lead investor, according to Crunchbase.
The suit alleges that Javice and another executive at Frank, Olivier Amar, hired a data scientist who was paid $18,000 to fabricate a list of fake names and addresses that were passed off as customers. The scientist used computer-generated data to create a fake user base that included information such as customer names, birthdates, and colleges they attended, the lawsuit alleges.
Javice and Amar, who held the role of chief growth officer, were allegedly paid $26 million as a result of the bank’s acquisition of Frank — money that JPMorgan said “they would not have received but for their misconduct.”
Frank marketed itself as a site that makes it easier for prospective college students to fill out federal financial aid forms.
JPMorgan claimed that when Javice approached the bank in the summer of 2021 about a potential acquisition, she vastly inflated the number of customers that had used the site.
“Rather than reveal the truth, Javice first pushed back on [JPMorgan’s] request, arguing that she could not share her customer list due to privacy concerns,” the bank said in its legal filing.
“After [JPMorgan] insisted, Javice chose to invent several million Frank customer accounts out of whole cloth.”
Days after JPMorgan filed its lawsuit, Javice countersued, claiming that the bank owed her millions of dollars in legal expenses that accumulated as a result of an internal investigation from last spring.
Javice alleges that she was fired by the investment bank from her position as head of student solutions in November. She claims she was let go by JPMorgan so that it could skirt a $20 million bonus payment that she was owed.
Her attorney, Alex Spiro, claimed that JPMorgan’s lawsuit was “nothing but a cover.”
“After JPM rushed to acquire Charlie’s rocketship business, JPM realized they couldn’t work around existing student privacy laws, committed misconduct and then tried to retrade the deal,” Spiro told The Post in an email.
“Charlie blew the whistle and then sued.”
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.
A JPMorgan spokesperson 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 the key facts,” the spokesperson said.
Javice and Amar both deleted their Twitter accounts. They were not immediately available to comment.
In a “40 under 40” profile by Crain’s New York Business, Javice likened Frank to a website that does for student loans was TurboTax does for Form 1040.
Javice said she was inspired to start Frank after her experience cobbling together scholarships, aid, and help from family to attend the prestigious Wharton School at the University of Pennsylvania.
[Written in collaboration with other media outlets with information from the following sources]
