Mike Cagney, chief executive of high-profile online lender Social Finance, said he will step down by the end of the year, making him the latest Silicon Valley figure to resign amid claims of sexual harassment and unhealthy corporate culture.
Cagney, who cofounded the firm better known as SoFi in 2011, was named in a lawsuit filed last month that alleged he fostered a culture permissive of sexual harassment. In a blog post late Monday, Cagney said he would step down because “the combination of HR-related litigation and negative press have become a distraction from the company’s core mission.”
He said he wants the company, which has an office in Healdsburg, to focus on growth, something that “can’t happen as well as it should if people are focused on me, which isn’t fair to our members, investors, or you.”
The company also announced that Cagney, a former Wells Fargo trader and software entrepreneur, has already been replaced as SoFi’s chairman. SoFi’s board elected Tom Hutton, an early investor and board member, will take over as chairman.
Last month, former employee Brandon Charles sued SoFi, saying he had been fired for speaking out against a company manager for openly discussing sexual acts with two younger female employees at the company’s office in Healdsburg in Sonoma County. Charles later amended the suit to include Cagney as a named defendant, alleging the CEO fostered a culture that allowed sexual harassment to continue unabated.
Cagney wrote in a company blog post earlier this month that SoFi had hired an outside attorney to investigate the claims in Charles’ suit and that sexual harassment “has no place at SoFi.”
Sexual harassment and the extent to which companies tolerate it has become a white-hot issue in Silicon Valley, leading to a wave of resignations, lawsuits and investigations. The issue was one of several factors that led to an internal investigation at Uber and to the recent ouster of that firm’s founder and now-former chief executive, Travis Kalanick.
Kalanick was not accused of sexual harassment but, rather, like Cagney, of fostering an environment that allowed or did not punish brutish behavior.
And a number of female entrepreneurs have come forward this summer alleging a pattern of sexual harassment by prominent venture capitalists in Silicon Valley.
Cagney’s impending resignation marks the latest in a string of recent high-level departures from SoFi, which so far this year has also lost its chief financial and chief revenue officers.
It also comes at an awkward time for the company, which continues to mull an initial public offering and is in the midst of seeking a bank charter — a move that would make it the first of a new crop of online finance companies seeking the additional power and responsibility that comes with a charter.
SoFi, founded in 2011, started out in the business of refinancing student loans, focusing on students from top universities. It has since broadened its offerings to include personal loans, mortgages and investment accounts. If approved for a Utah bank charter, it would also offer checking accounts and possibly credit cards.
The company, one of the biggest names in the growing world of financial technology or fintech, is known for its focus on so-called Henrys — an acronym that stands for “high earners, not rich yet” — and for its marketing, which has included Super Bowl ads as well as in-person events, such as cocktail parties and career-building workshops.