Frank’s workers questioned the stats before the JPMorgan acquisition

a job

June 16, 2023 | 12:37 p.m

Workers at Frank — the beleaguered startup headed by Charlie Javis — reportedly questioned the company’s financials before JPMorgan Chase bought the company for $175 million in 2021, and even called their boss “the king of finding the magic numbers.”

A court document filed in Delaware on Thursday revealed internal Slack messages among Frank’s employees, who asked, “Is this real?” When Javis “directed her to the team to change Frank’s public numbers” to 4.25 million users, according to court papers.

Clients of Frank, a financial planning website for college students, are believed to be closer to 300,000, according to the charges by JPMorgan, which sued over Javis’ disapproval of the deal.

The Slack exchange was included in Thursday’s hearing in which the court provided the revised staff names, but it did show an exchange where junior members of the team “expressed disbelief in the uniform” about the allegedly inflated stat.

“Do we really have 4.25 million students?” One worker wrote, and the others replied, “Why do I feel it’s so much smaller” and “I don’t know where they get that number from.”

“is this real?” another employee asked.

Meanwhile, another referred to the billions figure as “Charlie’s numbers.”

Insiders at Frank’s company—the beleaguered startup headed by Charlie Javis—reportedly referred to their boss as “the king of finding the magic numbers.”
Alec Tabac

The internal conversations took place in January 2021 — the same month that JPMorgan bought Frank’s company, marketed as a tool to help streamline college financial aid applications for students and parents — and showed panicked employees referring to Javice as “the king of finding the magic numbers.” “.

See also  The European Central Bank will discuss preventing banks from making billions of euros in windfall profits as interest rates rise

Javis’ attorneys declined to comment on the court filing on Thursday.

Javis was arrested in early April and charged with defrauding JPMorgan into buying a now-closed college financial aid firm under the guise that millions of clients would come with it.

A four-count indictment released last month showed Javis facing federal charges of securities fraud, wire fraud, bank fraud and conspiracy, each of which carries a maximum prison sentence of 30 years.

Frank’s workers reportedly questioned the company’s financials before JPMorgan Chase bought the company for $175 million in 2021.
Slack showed that “junior members of the team expressed disbelief in the uniform” about the allegedly inflated stats.

The indictment was filed 15 days after prosecutors said they and defense attorneys were in talks “about a possible settlement in this case,” language that sometimes presages an admission of guilt.

The 31-year-old pleaded not guilty to the charges and justified the change in user statistics by treating visitors to the site as users, the court filing said Thursday.

However, JPMorgan claims that they were notified of Frank users based on a “previous reporting metric,” in which customers were required to provide their name, email, phone number, and password to be considered a user.

When JPMorgan demanded proof of Frank’s clients, Javis allegedly paid an “outside data scientist” $18,000 to create a fake userbase list. The deceptive statements allegedly helped secure JPMorgan’s compliance with a deal.

JPMorgan said it learned of Javis’ alleged fraud after receiving few responses when it sent marketing materials to people it claimed were real.

JPMorgan claims they were told Frank’s user base was 4.25 million before the acquisition, but later learned it was supposed to be more than 300,000.
AFP via Getty Images

Representatives for JPMorgan did not immediately respond to The Post’s request for comment.

Javis confirmed that the Wall Street giant knew how many users Frank had at the time of the acquisition.

The New York native and Ivy League graduate has been released on $2 million bail since her first court appearance on April 4, the day after her arrest.

See also  Fed rate decision, South Korea trade, Australia unemployment, New Zealand GDP

Prior to selling Frank, Javis had received much media praise for her work, including on Forbes financial magazine’s “30 Under 30” list and Crain’s New York Business “40 Under 40” list in 2019.

load more…

Copy the share URL

Leave a Reply

Your email address will not be published. Required fields are marked *