JPMorgan Chase is suing Ex-CEO Charlie Javice for allegedly fabricating data and conning them into buying Frank, her Edu-startup.
Charlie Javice conned JPMorgan to buy her startup
JPMorgan Chase is suing 30-year-old Charlie Javice for selling her start-up for $175 million in 2021. Five years ago, the Ivy League grad founded “Frank”, the ed-tech firm that helped students apply for financial aid. Following the acquisition, she was appointed as the managing director at the US financial company to oversee student-focused products. She and Olivier Amar, the firm’s former chief growth officer are named in the lawsuit. Reportedly, the duo received $26 million in the sale “they would not have received but for their misconduct”.
However, problems started surfacing as Javice claimed the start-up had over 4 million users, leading JP Morgan to go ahead with the acquisition. However, following the purchase, they realized the problem after sending out a marketing test. The 4 million users allegedly refused to share their data for “privacy reasons”. They were all faked using a New York-area data scientist for forging 4.26 million “customer accounts”. In reality, the company has under 3,00,000 users.
More on the fraud
In her submission for the Forbes 30 under 30, Javvice stated “scaling” as the biggest hurdle for her education start-up. JP Morgan is claiming that the platform’s “lie” of over 4 million users led to the acquisition. Javice and Amar also filed lawsuits against the financial company for the allegations.
Alex Spiro, the duo’s lawyer is calling the lawsuit a “cover. Additionally, he is claiming JPMorgan “realized they couldn’t work around existing student privacy laws, committed misconduct and then tried to retrade the deal”. However, this is not the first time Javice is facing a fire. In 2020, members of Congress called on the Federal Trade Commission (FTC) to investigate the company’s “deceptive practices”.