Millions of fake students. An $18,000 payout for concocting synthetic identities. Emails that brushed off the possibility of “orange jumpsuits” and revealed frantic cover-ups.
Bank-fintech acquisitions that fizzle rarely have details as salacious as the saga of JPMorgan Chase and Frank. Earlier in January, news broke about a lawsuit that JPMorgan Chase filed on Dec. 22 alleging that it was defrauded by the founder of Frank, a college financial-planning website that it acquired in September 2021. The bank paid $175 million to acquire Frank on the premise that it had 4.25 million customers with accounts. In reality, the vast majority were fabricated, according to the complaint, and there were fewer than 300,000 true users. Charlie Javice, the founder of Frank, filed her own lawsuit against Chase the next day, countering that Chase launched “groundless investigations” into her conduct to deny the compensation it owed her, including a $20 million retention award.
Other bank-fintech deals have collapsed over the past year, such as UBS’s bid to merge with the automated wealth management…