The Silicon Valley detox continues as another executive steps down after accusations of sexual harassment surface. SoFi, a company that provides student loans, personal loans and mortgage refinancing, announced on Friday that cofounder Mike Cagney is resigning as CEO and a member of the board effective immediately.
A former Wells Fargo trader and hedge fund manager, Cagney co-founded SoFi in 2011 to compete with banks in the student loan market.
Cagney’s resignation follows a lawsuit from a former employee who claimed he was fired from the company after he reported incidents of women being harassed by their managers. The company started investigating the issue earlier this month.
Tom Hutton, SoFi’s executive chairman will serve as interim CEO until a new CEO is appointed.
“SoFi’s management and employees have built a remarkable company, and I look forward to helping the company continue to grow,” Hutton said in a statement. “The business is strong, stable and well-positioned. For now, there is no more important work than paving the way for future success by building a transparent, respectful and accountable culture.”
Cagney wrote a note to his employees. Here is the full text:
It is with a heavy heart that I am announcing that I will step down as CEO of SoFi by the end of
SoFi has been an amazing journey. From the early days with five of us in a one-room office in 2011, to 1,200 employees spread across the country today, few firms have matched our success.
We have had massive impact on our members lives, lending over $20 billion to our over 350,000 members, saving them over $1.8 billion in student loan interest and $500 million in credit-card interest, and helping them advance their careers and relationships.
That impact keeps growing. In the second quarter alone, we funded over $3.1 billion in loans, producing $134 million in revenue and $61.6 million in adjusted EBITDA. I could not be prouder of the company’s we’ve built together.
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.
I want SoFi to focus on helping members, hiring the best people, and growing our company in a way consistent with our values. 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.
I will be fully dedicated to the business through year-end, and will work closely with the Board to find the best candidate to lead us forward.
SoFi has built an incredible team. While we’ve come a long way, we’re still in the early innings of what we can and will accomplish. I’m grateful to have had the opportunity to help get us to where we are today – and I look forward to seeing where all of you take SoFi in the coming years.