Michael Cagney is stepping down as chief executive of Social Finance Inc. about a month after a former employee filed a lawsuit against the San Francisco-based online lending startup in a whistle-blower case, Bloomberg reports.
Cagney is the highest-ranked executive to step down from SoFi amid the sexual harassment claims. He will stay on board as CEO until the board names his successor, according to Bloomberg.
“I could not be prouder of the company we’ve built together. Recently, though, the focus has shifted more toward litigation and me personally," Cagney wrote in a memo to employees announcing his resignation. "The combination of HR-related litigation and negative press have become a distraction from the company’s core mission.”
Cagney co-founded SoFi in 2011 and the company is now one of the most valuable fintech startups, worth about $4.3 billion. It raised $1 billion in its last financing round in February, including investments from Silver Lake Partners and SoftBank, Bloomberg reports.
Brandon Charles, a former senior operations manager at SoFi, alleged in his Aug. 11 complaint that "he was fired in retaliation for speaking out on behalf of coworkers and defamed by the CEO."
Charles indicated in his complaint that he was fired a few weeks after reporting to human resources that a fellow manager had openly talked about having sex with a younger, female subordinate, according to Bloomberg.
“The culture of male bravado filters down from the leadership team at SoFi headquarters in San Francisco throughout the company, empowering other managers to engage in sexual conduct in the workplace,” Charles said in his statement.
Cagney becomes the second high-profile Silicon Valley CEO to step down amid allegations of workplace sexual harassment and inappropriate behavior, following the resignation in June of Travis Kalanick from Uber.
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