It seems new leadership will soon be coming to Social Finance, one of Silicon Valley's more prominent alternative lenders, as founding CEO Mike Cagney has announced his intention to step down by the end of the year.
Cagney has been dogged by sexual harassment claims of late — and accusations by former employees that the 46-year-old CEO had inappropriate relationships with members of SoFi's younger female staff.
Cagney has also been accused of pushing an aggressive growth agenda at the FinTech start-up, often at the expense of properly managing risk and making sure compliance issues were adequately provided for — according to people with "knowledge of the situation," who are not authorized to speak publicly, according to CNBC reports.
In a letter to employees sent out on Monday evening, Mr. Cagney wrote that "the combination of HR-related litigation and negative press have become a distraction from the company's core mission."
Mr. Cagney is stepping down as both chief executive and chairman.
With the forthcoming loss of its founding CEO, SoFI is the latest among luminary tech firms of the Valley to face issues around a work environment that employees complain is "toxic." Uber CEO Travis Kalanick was permanently pushed from his CEO role at Uber after claims of endemic sexual harassment combined with questions about the business tactics Uber has used to gain its position in the market. Kalanick was one of many senior leaders at Uber who left over the issue.
SoFi was founded in 2011 and began by refinancing the loans of elite students online; it has since branched out to offer mortgages and personal loans. The firm is currently seeking a banking license in Utah. All in all, SoFi is valued at more than $4 billion and has raised in nearly $2 billion from investors, including SoftBank, Discovery Capital and Baseline Ventures.
SoFi said on Monday that Mr. Cagney would be replaced immediately as the company's chairman by another board member, Tom Hutton, an early investor in the company.