Frank is closed by JPMorgan after Frank’s founder was sued

(Reuters) -JPMorgan Chase & Co on Thursday shut down its Frank website, a college financial planning platform it bought in 2021, after suing the startup’s founder and another executive for creating nearly 4 million fake customer accounts.

Frank was purchased by the largest U.S. bank in terms of assets for $175 million. This was to strengthen its relationships with students. According to the bank, Charlie Javice, founder of the bank, and Olivier Amar Chief Growth Officer, Frank had been created by more than 4.25 millions students.

The bank claimed that only 28% of the marketing test emails JPMorgan sent to Frank’s customers were delivered.

JPMorgan reported that it sees an average delivery rate of 99% when running similar campaigns.

In a lawsuit filed last month, JPMorgan stated that it paid $175 million to acquire what it believed was an engaged business with college-aged customers with 4.265million customers. Instead, it received a smaller business with 300,000 customers.

However, Javice’s lawyer denied the allegations.

JPMorgan had been sued by the founder a few days before, alleging that JPMorgan terminated her employment in November in “bad faith”, trying to avoid $28million in payments due to her following a “series groundless investigations” into their conduct.

JPM was rushing to acquire (Javice)’s rocketship business when they realized that student privacy laws were not being followed. JPM then committed misconduct and tried to retrade the deal,” Javice’s attorney stated. Javice also said that the bank’s lawsuit was “nothing more than a cover”.

Frank’s website stated that it was no more available on Thursday.

“Ms. Javice was not and isn’t a whistleblower. In an email statement to Reuters, a spokesperson for JPMorgan stated that any dispute would be resolved by the legal process.

(Reporting by Niket Nishiant in Bengaluru; Editing done by Shailesh Kuber, Devika Syamnath).