Embattled SoFi appoints interim CEO as Cagney resigns

By Ryan Weeks on Friday 15 September 2017

Alternative LendingDigital Banking

Executive Chairman Tom Hutton takes on interim CEO role at fintech lender SoFi as its board accepts Mike Cagney’s resignation.

Executive Chairman Tom Hutton takes on interim CEO role at fintech lender SoFi as its board accepts Mike Cagney’s resignation.

Mike Cagney is out as the CEO of SoFi, the company he founded. Earlier this week we learned that the SoFi chief would be stepping down as CEO before the end of the year. That process has now been accelerated, with the company’s board accepting Cagney’s resignation as CEO and as a member of the board, effective immediately. The firm will now ramp up its search for a new CEO.

In the meantime, Executive Chairman Tom Hutton (pictured) will assume day-to-day leadership of the company by stepping into the role of interim CEO. Hutton was appointed to SoFi’s board in June 2012, and is one of the company’s early-stage investors. He is the manging director of XL Innovate, a venture capital firm focused on insurance and financial technology. His past roles include stints as CEO of White Mountain Re Group and Risk Management Solutions Inc.

SoFi is a leading US fintech lender which uses institutional money to lend to predominantly young borrowers. While student debt refinancing is the core of its offering, over the years it has aggressively rolled out consumer loan, mortgage and insurance products.

The company is currently embroiled in a sexual harassment scandal that seems to darken with each passing day. Beginning as a lawsuit against the firm filed by a former employee who claimed to have been fired for raising concerns over the treatment of female employees by managers, the accusations have come thick and fast since – and have been steadily more sordid.

Former SoFi employee Yulia Zamora described the company as “a frat house” in an interview with The New York Times. The article alleges that Cagney regularly boasted of his “sexual conquests” and behaved intimately with a number of young female employees. The article also includes the claim that Cagney once put customer service representatives in charge of lending decisions, “despite them having no experience in the area”. SoFi quickly issued a response to the article, refuting some of its claims.

Commenting on his appointment as interim CEO, Hutton said that SoFi’s management and employees have built “a remarkable company”.

"The business is strong, stable and well-positioned,” he said. “For now, there is no more important work than paving the way for future success by building a transparent, respectful and accountable culture.”

On Monday, SoFi announced that Steven Freiberg, acting CFO and a member of the board, would be taking an expanded role as vice chairman. He has previously served as CEO of E*Trade and as CEO of Citigroup’s Global Consumer Group. 

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