JPMorgan Chase is suing 30-year-old entrepreneur Charlie Javice, claiming he lied about the number of users for Frank, a financial-planning site that the bank bought for $175 million.
According to a lawsuit filed on Dec. 22, Javice led the bank to believe that Frank had 4.265 million customers, mainly from the college-aged market segment, but in reality, the site had fewer than 300,000 customers.
The suit also accuses Javice and another executive at Frank, Olivier Amar, of hiring a data scientist who was paid $18,000 to fabricate a fake list of names and addresses to make it appear as though the site had more customers. Mark Rowan, the CEO of Apollo Global Management and a lead investor in Frank, is also named in the lawsuit.
The bank further claims that Javice and Amar hired a data scientist to fabricate a fake list of names and addresses to make it appear as though the site had more customers.
As a result of the alleged misconduct, Javice and Amar were allegedly paid $26 million from the bank's acquisition of Frank, which JPMorgan claims 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.
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 users accounted for on its platform when Musk agreed to buy the company for $44 billion last year.