JPMorgan Chase has accused the founder of a student finance platform, Charlie Javice, of instructing her team to manipulate the company’s website to falsely portray higher user numbers. In a court filing submitted in Delaware federal court, the US bank alleged that Javice instructed her staff to change the public-facing numbers to claim that the business had 4.25 million student users. However, at the time, the company actually only had 300,000 users.
Javice defended her actions by arguing that she considered website visitors as users. Internal messages cited in the filing revealed Frank employees jokingly referring to her as the “king of finding magic numbers.” JPMorgan raised these allegations in a lawsuit against Javice and another Frank executive.
Furthermore, Javice has also faced criminal fraud charges from US prosecutors who claim that she falsified user numbers during the sale of the company. Representations for Javice and JPMorgan have yet to comment on these recent developments. Javice has pleaded not guilty to the criminal case and has denied the bank’s allegations in a countersuit.
Frank, founded by Javice in 2017, provided college students with assistance in applying for financial aid. The company was eventually acquired by JPMorgan for $175 million in 2021. However, this episode has tarnished the reputation of Javice, a promising entrepreneur and a graduate from the Wharton School at the University of Pennsylvania. It has also raised concerns about JPMorgan’s due diligence.
In response to a motion from Javice and the former Frank executive seeking to proceed with discovery in the case, JPMorgan filed a response opposing the motion. The bank argued that if discovery were to proceed, it should be done in full, including the opportunity to depose Javice. In a separate ruling, a Delaware court ordered JPMorgan to cover Javice’s legal fees in relation to her defense against the bank.
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