A federal judge Friday refused to let an executive of the college financial-planning startup Frank escape JPMorgan Chase’s civil lawsuit against him and Frank’s founder, Charlie Javice.
The refusal comes a day after Olivier Amar, Frank’s chief growth officer, pleaded not guilty to charges of wire fraud, bank fraud, securities fraud and conspiracy. Amar was added Wednesday to amended complaints from the Justice Department and the Securities and Exchange Commission.
The SEC alleges Javice misrepresented Frank’s user base — a figure she said was 4.25 million but later was found to number roughly 300,000 — in an attempt to entice JPMorgan into a deal worth $175 million, as a competitor bank was also allegedly pursuing the startup.
Amar, according to the SEC, told a Frank engineering employee, ahead of the acquisition, to generate a "synthetic" set of data to supplement actual data from visitors to Frank’s website.
When the engineer refused, Javice allegedly hired a data science professor at a New York-area college to create bogus accounts, and Amar negotiated with an external data compiler to procure data on millions of students for $105,000, the SEC said.
Javice appeared in court Thursday, in addition to Amar, and repeatedly shook her head “no” during a prosecutor’s summary of the case, Bloomberg reported.
One of Javice’s attorneys, Alex Spiro, accused the DOJ on Thursday of “regurgitating to the court JPMorgan’s civil case against my client,” adding that JPMorgan only gave prosecutors evidence that favored its claims against Javice and Amar, according to Bloomberg.
Amar has sought to downplay his involvement, aiming to dismiss JPMorgan’s suit on the grounds that he was not a party to the merger agreement, attended only one meeting with the bank and “legitimately acquired” a data set that is not alleged to have been used in negotiating the 2021 deal.
JPMorgan has been “throwing in Mr. Amar’s name when convenient despite knowing that Mr. Amar was not involved in either the alleged misconduct or any statements, representations, or warranties made to JPMC during the merger,” Amar’s lawyers said in March, according to Bloomberg.
Javice was charged in April in the case and pleaded not guilty the following month to the same charges Amar faces. Each could see up to 30 years in prison if convicted on the most serious counts. Amar was released Thursday on $1 million bond. His initial omission from the DOJ’s case had sparked speculation that he may have been cooperating with prosecutors.
JPMorgan sued Javice and Amar in December, and shut down Frank’s website in January.
Javice countersued the bank, alleging it launched an internal investigation of the Frank deal in the spring of 2022, then fired her from her role as head of student solutions to get out of paying her a $20 million retention bonus.
Amar, for his part, received about $5 million from the merger and a $3 million retention bonus from JPMorgan after the acquisition, according to the SEC.
