2013 Wharton graduate Charlie Javice is countersuing JPMorgan Chase & Co. based on fraud claims of her startup, Frank.
In her $27.9 million countersuit, Javice claimed that JPMorgan was aware of the number of Frank users throughout the deal, The Wall Street Journal reported. According to Javice, 4 million users did go on Frank’s website to read articles about financial aid processes. She did not dispute that less than half a million users used the platform to complete financial aid forms.
Javice further stated that JPMorgan’s lawsuit is intended to cover up the bank's misconduct of planning to monetize information of past students who submitted the Free Application for Federal Student Aid, which goes against federal regulations.
Moreover, during Frank's audit, Javice claimed that JPMorgan requested mock data that mirrored actual customers on Frank as a way to audit the consumer base without breaching privacy concerns and that the bank was aware that the provided data did not reflect real user data.
Frank, a financial aid assistance program, was founded by Javice in 2016. Javice's goal was to make higher education more affordable by reducing student debt via financial aid rather than through loans. Frank's software sought to help students bargain for more financial aid through the FAFSA.
"We work with you and make sure they get someone professional on the other side,” Javice told The Daily Pennsylvanian in 2018.
Javice sold Frank to JPMorgan for $175 million in 2021.
JPMorgan filed a lawsuit against Javice in December 2022 after firing her the previous month. The bank alleged that Javice lied about the number of customers of her startup and that she created over 4 million fake user accounts. According to the lawsuit, Frank had less than 300,000 actual users.
Frank’s Chief Growth Officer, Olivier Amar, who is also a data science professor, allegedly helped create a fake list of students' names, email addresses, and other personal information, according to Forbes.
“Chase grossly mismanaged its investment from the start, and it decided it would rather walk the investment back than work on it further,” Javice’s complaint said.