Fintech News

Mike Cagney Suddenly Ceases to be SoFi CEO.


SoFi announced last week that its hitherto CEO, Mike Cagney, has stepped down. Before his resignation, it was reported that Cagney would be stepping down before the end of the year. However, the escalation of the bad news forced the board to take action leading to his resignation earlier than expected.

Tom Hutton, the current executive chairman will serve as the interim CEO as the company searches for a new permanent CEO. Upon taking over as the interim CEO, Hutton has since released a statement to the effect that the company’s management and employees have built a remarkable company which he is keen on steering forward. He describes SoFi’s business as strong, stable and well positioned. The statement further notes that the most important thing at the moment is to pave way for the company’s future success by building a respectful, transparent and accountable culture.

Peter Renton of Lend Academy describes the current developments as a stunning fall for Cagney, who he has always considered as a thought leader in the fintech space. He says that SoFi has really impressed him because despite all the troubles, it has achieved a lot, earning the reputation of a leading fintech firm in the US. SoFi is currently valued at more than $4 billion.

The trouble at the company has persisted for a while, going by the various media reports of sexual abuses of junior female employees by their senior male counterparts. Cagney has been at the centre of these controversies. The New York times reports that in 2012, the board was informed of his communication with Laura Munoz, then an executive assistant. However, the board said that it did not find any evidence of a sexual relationship between the two. Cagney would later be seen holding hands with another young female employee and talking to her intimately. In another instant, he bragged to other employees about his sexual conquests and the size of his sexual genitalia.

A previous lawsuit filed against Cagney accused him of empowering other senior staff to engage in sexual conduct at the work place. Indeed, the company’s Chief Financial Officer talked openly about women’s breasts and is reported to have offered female employees bonuses for losing weight. According to the New York Times, some employees found colleagues having sex with supervisors at SoFi’s main office in Healdsburg, California. This was the subject of the sexual harassment suit filed last month.

The many stories of malpractice in SoFi paints a picture of a company that is dysfunctional and a lot has to be done to rebuild it. This will require many managers to be shown the door as well to pave way for a fresh management willing to build a successful, transparent and accountable culture.

Amidst all these controversies, the company says that its business is performing well and that it is now a major innovative player in consumer finance.

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