Fintech lender SoFi facing sexual harassment lawsuit

By Ryan Weeks on Monday 14 August 2017

Alternative LendingDigital Banking

SoFi becomes latest Silicon Valley start-up to face allegations of turning a blind eye to sexual harassment.

Ride-hailing app Uber is yet to find a replacement for former CEO Travis Kalanick, who was fired in June. The embattled Kalanick, who remains an influential board member at Uber, was said to have presided over a toxic corporate culture in which claims of sexual harassment were ignored – although that is by no means the extent of the allegations against him.

Now SoFi, one of the largest companies within the fintech sector globally, is facing similar claims. A former employee named Brandon Charles, who worked at the company for a few months earlier this year, has claimed in a lawsuit filed last Friday that he was witness to the harassment of female employees by managers – and that he was fired for reporting it. The news was first reported by The New York Times.

SoFi representative Jim Prosser told AltFi that Mr. Charles’ claims were investigated and found to be baseless.

“While we have not received a copy of the complaint, we’re familiar with Mr. Charles’ allegations,” he said. “They were investigated in depth by the company and found to have no merit. We will vigorously defend ourselves against any claims otherwise.”

But Robert Ottinger, the lawyer handling the case, told The New York Times that there appears to be a “large groundswell of intense employee dissatisfaction at SoFi”. He said that he intends to file a lawsuit claiming broader mistreatment of other SoFi employees next week. 

Mr. Charles worked in SoFi’s loan processing office in Healdsburg, California. He claims to have witnessed his manager communicate using explicit sexual innuendo and refer to one female employee using lewd gestures which emphasised her physical appearance. Mr. Charles was fired a few weeks after reporting these incidents. He claims to have been told that his complaints were “devoid of merit” and that alerting supervisors as he did fell outside of his “appropriate duties”.

His lawsuit also says that he witnessed managers improperly recording loans in order to boost their pay. The suit claims that managers cancelled loan applications rather than reporting internal errors, in order to protect their performance metrics.

Mr. Prosser issued a direct response to this allegation: “Managers can't un-assign loan applications once assigned to a reviewer, and loan applications can't be cancelled except by the applicant themselves or by time expiration.”

SoFi is renowned for its aggressive approach to marketing and expansion, often positioning itself as diametrically opposed to incumbent banks, where other fintech firms have preferred to depict their activities as complementary. The lender paid $5m for a 30-second advertising slot during the Super Bowl in 2016, in which it touted the strapline: “great loans for great people”.

The company has recently lost a number of senior executives, including CFO Nino Fanlo and co-founder Dan Macklin. Most recently it saw former chief revenue officer Michael Tannenbaum depart.

SoFi is backed by Japanese technology giant SoftBank. SoftBank’s Vision Fund, the world's largest technology venture fund, invested around $1bn in the firm in 2015. A recent article in The Wall Street Journal has suggested that the company is moving closer to its long-anticipated IPO, after posting strong results in the second quarter.  

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