In 2021, JPMorgan Chase paid $175m for Frank, a college financial aid platform.
But if you go to the website today, it tells you it’s no longer available and to file your FAFSA at StudentAid.gov.
At the time of the acquisition, founder Charlie Javice claimed Frank had 4.25m customers, per The Wall Street Journal.
But when JPMorgan sent emails to 400k users, only 28% were delivered, per court filings.
Now, JPMorgan is suing Javice and Frank exec Olivier Amar, alleging they faked 4m+ accounts to bolster the startup’s value when, in reality, it had less than 300k customers.
JPMorgan claims that when it asked Javice to prove her customer count, she initially declined, citing privacy concerns, but eventually produced a list.
JPMorgan alleges she paid a data science professor $18k to make fake accounts to match her claims, after Frank’s engineering chief refused to, per court filings.
- In one email to the professor, Javice allegedly wrote, “Will the fake emails look real with an eye check or better to use unique ID?”
- Amar is accused of paying ASL Marketing $105k for a data set of 4.5m students.
Javice’s lawyer claims JPMorgan is lying because it owes the founder millions, which JPMorgan denies.
Interestingly, in 2020…
… members of Congress expressed concern that Frank was not making things easier for students, creating unnecessary work for financial aid administrators, and potentially selling student data, per Forbes.
The FTC also accused Frank of potentially misleading customers.
Fun fact: Over on Twitter, @stonks_dot_com pointed out that Javice was a Forbes 30 Under 30 recipient, alongside esteemed colleagues Sam Bankman-Fried, Caroline Ellison, and Martin Shkreli.