JP Morgan Chase is suing the 30-year-old founder of Frank, a buzzy fintech startup it acquired for $175 million, according to a report by Forbes. The financial giant is suing Charlie Javice for allegedly lying about its scale and fabricating almost 4 million customer accounts.
The lawsuit filed last month in U.S. District Court in Delaware claims that Ms Javice and another executive paid a data scientist $18,000 to create a list of fake customers when its own employee refused. The bank claims that it was misled by the fake data and is now seeking damages.
The report says that when JP Morgan asked for proof during due diligence, Javice allegedly created an enormous roster of "fake customers - a list of names, addresses, dates of birth, and other personal information for 4.265 million 'students' who did not actually exist." In reality, according to the suit, Frank had fewer than 300,000 customer accounts at that time.
The complaint reads, "Javice first pushed back on JPMC's request, arguing that she could not share her customer list due to privacy concerns. After JPMC insisted, Javice chose to invent several million Frank customer accounts out of whole cloth."
The complaint had screenshots of presentations Ms Javice gave to JP Morgan illustrating Frank's growth and claiming it had more than 4 million customers.
Her startup aimed at improving the student loan application process for young Americans seeking financial aid, according to Forbes.
Not just Ms Javice, the suit also names Frank's chief growth officer Olivier Amar.
Ms Javice and Amar have also filed a lawsuit against JP Morgan in response to the bank's allegations. Ms Javice's lawyer has called the lawsuit 'nothing but a cover'. He further claims that "JPMorgan "realized they couldn't work around existing student privacy laws, committed misconduct and then tried to retrade the deal."
