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11-05-2023, 11:09 AM
https://www.forbes.com/sites/alexandrale...73a4821f64
‘Fake It 'Til You Make It’: Meet Charlie Javice, The Startup Founder Who Fooled JP Morgan
“There were definitely times where I painted a rosier picture than things truly were,” Frank’s founder and former CEO said months before JP Morgan bought her startup for $175 million.
In 2021, Charlie Javice, the young founder and former CEO of Frank, pulled off a master stroke: Selling her fintech startup to JP Morgan Chase for $175 million. “It’s not every day that an entrepreneur gets her fairytale new beginning (not ending!),” she wrote on LinkedIn at the time.
Just over a year later, JP Morgan’s chief executive Jamie Dimon is under fire for a due diligence process that appears to have missed what the bank now claims was a major red flag about Javice’s business: legions of fake customers. JP Morgan is suing Javice for allegedly tricking it into buying Frank—which promises to simplify the student financial aid application process—by creating a list of more than 4 million college-aged users that don’t exist.
In a lawsuit filed late last year in U.S. District Court in Delaware, the financial giant alleges that Javice enlisted the help of a data science professor to generate an enormous roster of bogus Frank users to impress JP Morgan—when in reality, fewer than 300,000 students were signed up. Javice, who became a managing director at JP Morgan as part of the acquisition, has since been fired and is also suing JP Morgan. Her complaint claims the company “manufactured a for-cause termination in bad faith” and “worked to force Ms. Javice out” to deny her millions in compensation that she was owed.
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‘Fake It 'Til You Make It’: Meet Charlie Javice, The Startup Founder Who Fooled JP Morgan
“There were definitely times where I painted a rosier picture than things truly were,” Frank’s founder and former CEO said months before JP Morgan bought her startup for $175 million.
In 2021, Charlie Javice, the young founder and former CEO of Frank, pulled off a master stroke: Selling her fintech startup to JP Morgan Chase for $175 million. “It’s not every day that an entrepreneur gets her fairytale new beginning (not ending!),” she wrote on LinkedIn at the time.
Just over a year later, JP Morgan’s chief executive Jamie Dimon is under fire for a due diligence process that appears to have missed what the bank now claims was a major red flag about Javice’s business: legions of fake customers. JP Morgan is suing Javice for allegedly tricking it into buying Frank—which promises to simplify the student financial aid application process—by creating a list of more than 4 million college-aged users that don’t exist.
In a lawsuit filed late last year in U.S. District Court in Delaware, the financial giant alleges that Javice enlisted the help of a data science professor to generate an enormous roster of bogus Frank users to impress JP Morgan—when in reality, fewer than 300,000 students were signed up. Javice, who became a managing director at JP Morgan as part of the acquisition, has since been fired and is also suing JP Morgan. Her complaint claims the company “manufactured a for-cause termination in bad faith” and “worked to force Ms. Javice out” to deny her millions in compensation that she was owed.
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