JPMorgan files fraud lawsuit against founder of startup he bought
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JPMorgan Chase bank accused Charlie Javis, the founder of Frank, a fintech startup he bought in September 2021, of fraud, reports Bloomberg. According to a lawsuit filed in a Delaware federal court last December, JPMorgan paid $175 million for the startup simply because it believed it was a business with 4.3 million college-age customers. However, the bank’s internal review later revealed that Charlie Javis’s company used false accounts to significantly inflate the number of Frank’s customers. “As a result, it turned out that there were less than 300,000 of them,” JPMorgan said in a statement of claim. In November last year, the founder of the startup was fired.
Charlie Javis herself filed a counterclaim against JPMorgan, demanding reimbursement of her legal costs. She alleges that the bank did not conduct due diligence of the acquired asset, and the trial is an attempt by the bank not to pay her compensation for the dismissal.
Startup Frank was founded by Charlie Javis in 2016. It makes it easier for American students to apply for a higher education grant. In 2019, Charlie Javis was named to 30 under 30 list American Forbes among representatives of the financial industry.
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