JPMorgan Chase has officially shut down Frank, the college financial aid platform which the investment first recently purchased for close to $175 million just two years ago, and has since slammed Charlie Javice, the founder of the platform, with a lawsuit in the wake of learning that she allegedly fabricated well over 90% of the accounts signed up for the website.
The suit filed by JPMorgan directly accused Javice of making false claims in documents, verbal presentations, and pitch materials that well over 4.25 million students had created accounts with Frank in order to deal with their financial aid applications. The bank explained that analysts had officially confirmed that close to 4 million of the registered accounts were fakes after a number of test emails had been sent out to a few hundred thousand of the supposed customers and only successfully saw 28% of the userbase response.
The lawsuit stated that Javice had been given a choice between “revealing the truth about her startup” or “lying to inflate Frank’s value” in every interaction she experienced with JPMorgan. “Javice chose each time to lie, and the evidence shows that time and again she layered fraud upon fraud,” finalized the bank.
Javice ended up becoming an employee with JPMorgan in the wake of the $175 million buyout, which had been finalized back in 2021. She was successful in her attempts to bargain for an additional $20 million in retention bonus perks within her new employment contract.
Javice also elected to file suit targeting JPMorgan just a scant few days before they chose to file the suit against her, making the claim that she was still owned millions of dollars in regard to a number of expenses she took on as part of an internal investigation that started this past spring, as explained by a report from the Wall Street Journal. As an attorney representing Javice, Alex Spiro explained to the outlet that his suit coming from JPMorgan was “nothing but a cover.” He alleged that the group “rushed to acquire” the company, then found out that “they couldn’t work around existing student privacy laws, committed misconduct and then tried to retrade the deal.”
The website previously utilized by Frank currently states that the service is “no longer available.”
JPMorgan issued the claim that Javice did not deign to provide the company with a list of customers because of “privacy concerns.” Many experts seemingly thought that both she and Olivier Amar, another person who worked as an executive at Frank, allegedly went to the company’s director of engineering and tried to force him to create fake bot accounts for customer accounts by utilizing computer algorithms. When the engineer refused to take part in their plans, both Amar and Javice allegedly hired on a data science professor to create millions of customer profiles with names, email addresses, and birthdays to provide to JPMorgan.
The lawsuit also stated that Javice was most concerned with the email addresses, asking the professor whether they would “look real with an eye check.”
