JPMorgan lawsuit persists despite second high-ranking Frank executive's attempts to evade it, according to the ruling of the judge.
In a series of developments, the founder of financial-planning startup Frank, Charlie Javice, and its executive Olivier Amar, find themselves embroiled in a legal battle with JPMorgan Chase and several regulatory bodies. The saga began in December, when JPMorgan sued Javice and Amar, alleging fraudulent activities. The lawsuit led to the shutdown of Frank's website in January. Recently, Amar was added to amended complaints from the Justice Department and the Securities and Exchange Commission (SEC), and he pleaded not guilty to charges of wire fraud, bank fraud, securities fraud, and conspiracy. According to the SEC, Javice is accused of misrepresenting Frank's user base, while Amar is alleged to have told a Frank engineering employee to generate a 'synthetic' set of data. To bolster these claims, Amar is said to have hired a data science professor at a New York-area college to create bogus accounts. Moreover, Amar is reported to have negotiated with an external data compiler to procure data on millions of students for $105,000. He allegedly attempted to entice JPMorgan into a $175 million deal by misrepresenting Frank's user base. Amar received about $5 million from the merger and a $3 million retention bonus from JPMorgan after the acquisition, according to the SEC. Javice countersued JPMorgan, alleging the bank fired her from her role as head of student solutions to avoid paying her a $20 million retention bonus. In court, Javice appeared on Thursday and repeatedly shook her head during a prosecutor's summary of the case. Interestingly, no mention of purchasing licensing rights was found in the provided text. Amar was released on a $1 million bond on Thursday, and his lawyers accused the DOJ of regurgitating JPMorgan's civil case against him in court, according to Bloomberg. The text did not provide any new information about the Fintech industry. The data science professor employed at Columbia University was not named in the report. This ongoing legal battle is a significant development in the Fintech world, with each of Javice and Amar facing up to 30 years in prison if convicted on the most serious counts.
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