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JPM is suing the leaders of Frank, a financial-aid business it bought for $175m in 2021, alleging they duped the bank by making up millions of fake student accounts to show it had a growing business. Frank CEO Charlie Javice approached the bank in summer 2021 about a potential acquisition, according to the lawsuit. She claimed Frank had 4.25m users, but the company had fewer than 300,000 real users, the suit said, less than 10% of the stated 4.25m figure.
“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 court filing. “After [JPMorgan] insisted, Javice chose to invent several million Frank customer accounts out of whole cloth.”
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