SoFi CEO to step down after harassment lawsuit
Social Finance said Chairman and CEO Mike Cagney plans to step down following a lawsuit that alleged sexual harassment by managers and improper loan paperwork at the online personal finance start-up.
Cagney, who also is co-founder, plans to remain in the role until the board names his successor, likely by the end of the year. He was replaced immediately as board chairman by venture capitalist Tom Hutton, who has been a board member since 2012.
Social Finance, often known as SoFi, and Cagney were sued last month by a former employee, Brandon Charles, who claimed he was fired for reporting sexual harassment of female colleagues by their managers and outing improper recording of loans by several managers.
“I could not be prouder of the company’s (sic) we’ve built together,” Cagney wrote in a company blog post Monday. “Recently, though, the focus has shifted more toward litigation and me personally. The combination of HR-related litigation and negative press have become a distraction from the company’s core mission.”
This month, Cagney confirmed in a company memo that SoFi hired attorneys to investigate the claims.
“To the extent we determine that there is any truth to the allegations, swift and severe action will be taken,” Cagney wrote. “To be blunt, that kind of behavior has no place at SoFi, and we’re not going to tolerate it.”
SoFi, based in San Francisco, is one of the hottest start-ups in the personal finance sector, with revenue rising 67% year over year to $134 million in the second quarter. It also funded $3.1 billion in loans during the quarter.
SoFi says it has so far lent more than $20 billion to more than 350,000 people.
SoFi’s legal challenges are the latest example of heightened pressure on some Silicon Valley companies to address workplace culture issues.
Two weeks ago, ride-service provider Uber named Dara Khosrowshahi as its new CEO after cofounder Travis Kalanick resigned in June under pressure from investors. Earlier this year, former Uber engineer Susan Fowler came forward with allegations that her reports of sexual harassment went ignored by the company’s human resources department. Amid accusations of enabling a culture of sexism, Kalanick fired more than 20 employees before he himself left.