JPMorgan sues Aleph over Frank fraud fallout
The bank seeks to recover losses from the $175 million acquisition built on fabricated customer data.
JPMorgan Chase has filed a lawsuit against early investors in Frank, including Israeli venture capital fund Aleph LP, founded by Michael Eisenberg. The lawsuit, parts of which were made public late last week, shows that the bank is seeking to recover significant losses stemming from its $175 million acquisition of the startup in 2021.
The deal collapsed after it was discovered that the company’s founder, Charlie Javice, had presented fictitious data: while JPMorgan believed the company had 4.3 million customers, it actually had fewer than 300,000 registered users. Aleph, one of Frank’s early and prominent investors, now finds itself at the center of the legal battle.
According to testimony from a bank executive during Javice’s criminal trial, Eisenberg was the one who introduced the entrepreneur to JPMorgan executives, ultimately leading to the failed acquisition. The lawsuit alleges that there was an agreement governing the investors’ liability for losses resulting from fraud.
According to reports, JPMorgan approached the investors as early as 2022, shortly after the fraud was uncovered, demanding that they honor the agreement and compensate the bank for its damages. The investors refused and maintained their position even after Javice was convicted of fraud in March 2025 and sentenced to seven years in prison. She is currently free on bail pending appeal.
While proceedings against the Aleph fund continue, other defendants appear to be moving toward settlement. Bloomberg reported that Mark Rowan, CEO of Apollo Global Management, which had invested privately in the company, has reached a settlement with the bank. On Wednesday, JPMorgan filed a court notice dismissing the lawsuit against Rowan’s trust, just one day after a redacted version of the complaint became public.
Aleph said: “JPMorgan Chase’s lawsuit filed against Aleph concerns a contractual dispute related to an acquisition of an Aleph portfolio company. The lawsuit does not allege that Aleph participated in or had any knowledge of fraud in connection with the bank’s acquisition of Frank.
“We have great respect for JPMorgan Chase and its leadership, but we disagree with their interpretation of the support agreement at issue. We are confident in our position and look forward to addressing the matter in court. We have no further comment at this time.”
