American multinational investment bank, JPMorgan Chase has filed a lawsuit against Charlie Javice, founder of fintech startup Frank, for allegedly duping the bank to buy her company for 175 million dollars. Case details suggest that JPMorgan Chase filed the lawsuit in a Delaware court in December 2022.
According to the lawsuit filed by the bank, Charlie Javice approached the bank in 2021 and talked about a potential sale of her company to JPMorgan. During the talks, Ms. Javice allegedly claimed that her college financial planner platform had more than 4 million users. When she was asked to show the material to support her claim, Javice said that she could not do it due to privacy concerns.
Despite the ambiguity in the number of users, the multinational bank went on to acquire Frank for 175 million dollars. After a few months, officials at the bank found out that the fintech platform had only 300,000 users, multiple times lesser than what Ms. Javice had claimed earlier. Charlie Javice with the help of a computer scientist allegedly planted the details of 4.265 million ‘students’ who do not exist into the database of Frank.
Who is Charlie Javice?
Charlie Javice is a New York-based entrepreneur and businesswoman who founded the fintech startup, Frank in 2016. Following the acquisition of Frank by JPMorgan Chase, Charlie Javice also worked as Head of Student Solutions at the American banking company.
Ms. Javice was fired from JPMorgan Chase in November 2022 for duping the bank into acquiring her fintech startup for 175 million dollars.
Her LinkedIn account also states that she studied bachelor’s in business and finance at the Wharton School of the University of Pennsylvania.
Frank, which was founded by Charlie Javice in 2016, is an online platform that helps students in the United States get access to and easily apply for financial aid.
Allegations of JPMorgan Chase
According to the bank, Olivier Amar, a senior executive at Frank, hired a computer scientist and paid him 18000 dollars for creating a fake user database with fake names and addresses. With the knowledge of Ms. Javice, this computer scientist created fake users’ names, birthdates, and colleges they attended.
Charlie Javice allegedly decided to plant fake users after JPMorgan insisted that she should prove her claims of 4 million users.
The lawsuit also states that following the acquisition of Frank by JPMorgan, Charlie Javice and Olivier Amar received 26 million dollars as part of the deal.
Ms. Javice’s countersuit against JPMorgan
A few days after the lawsuit by JPMorgan Chase, Charlie Javice filed her countersuit against the banking company stating that she was fired from the bank in order to skirt a $20 million bonus payment that she was owed.
Alex Spiro, the attorney representing Charlie Javice told news agencies that JPMorgan Chase committee misconduct when they found out that they cannot operate Frank efficiently without violating student privacy laws. According to Spiro, the bank tried to retrade the deal and Ms. Javice acted as a whistleblower against the bank’s misconduct.
A spokesperson of JPMorgan Chase rejected the claims made by Alex Spiro and stated that Charlie Javice was not and is not a whistleblower.
