JPMorgan noted that the deal gives it the “fastest-growing college financial planning platform” used by more than 5 million students at 6,000 institutions. It also provided access to the startup’s founder, Charlie Jabis, who joined the New York bank as part of the acquisition. Months after the deal was closed, JP Morgan said it learned the truth after sending marketing emails to a group of 400,000 franc clients. About 70% of the emails were returned, the bank said in a lawsuit filed last month in federal court.
More in-
Javis, who turned to J. times. In mid-2021 regarding a possible sale, Morgan lied to the bank about the scope of his startup, the bank claims. Specifically, after being pressed to confirm Frank’s customer base during the due diligence process, Javis used a data scientist to create millions of fake accounts. “In order to make money, Javis decided to lie, including a lie about the success of Frank, its size and the depth of its market penetration, in order to get JP Morgan to purchase the platform for $175 million,” the bank said.