Online lender SoFi investigating sexual harassment claims

Social Finance Inc., the hot online lender known as SoFi, has launched an internal investigation into claims of sexual harassment at the San Francisco company.

In a post on the company blog, co-founder and Chief Executive Mike Cagney wrote Friday that outside attorneys are conducting an investigation in response to a lawsuit filed last month and amended this week by a former employee.

“To the extent we determine that there is any truth to the allegations, swift and severe action will be taken,” Cagney wrote. “To be blunt, that kind of behavior has no place at SoFi, and we’re not going to tolerate it.”

The lawsuit and Cagney’s response are the latest allegation of improper behavior to dog start-ups and the tech industry.

The executive board of ride-hailing company Uber recently hired a new chief executive to replace Travis Kalanick, who left amid complaints of sexual harassment, discrimination, bullying and retaliation at the San Francisco-based firm.


Also, Dave McClure, the founder of the business mentorship program 500 Startups, was stripped of his chief executive title this year following an internal investigation into his behavior toward women.

SoFi is a leading fintech firm, a new breed of companies that offer loans through online platforms. It recently took steps to rival the nation’s biggest banks by applying for a Federal Deposit Insurance Corp. charter so the company could offer traditional banking services.

The original lawsuit was filed by former employee Brandon Charles, who claims he was fired because he spoke out against a SoFi manager for openly discussing sexual acts with two younger, female subordinates at the company’s Healdsburg, Calif., operations office.

Charles had been hired in March as a senior operations manager, according to the lawsuit, which also claimed he suffered retaliation for reporting improprieties in the processing of some loan applications.

Charles amended his original complaint on Thursday, adding Cagney as a named defendant and claiming that the chief executive fostered a culture that permits sexual harassment.

“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,” according to the amended lawsuit filed in Superior Court in San Francisco. “Not only is sexual harassment permitted, but employees who oppose it, such as Mr. Brandon Charles, are vilified.”

In his blog post, Cagney said the company had learned that several people were willing to come forth and formally allege they had been victims of or had witnessed “improper activity” at the Healdsburg office.

He added that the company was creating “an anonymous means for employees to provide our counsel information that could be helpful to their investigation.” The company, he said, is also starting new training and education programs.

Still, Cagney wrote that the company was “confident in our position in these cases.”

In a statement issued Saturday, the company said that Charles’ claims were investigated and “found to have no merit.”

“We will vigorously defend ourselves against any claims otherwise,” the statement said.

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4:30 p.m.: This story was updated to include a statement from a Social Finance spokesman.

This article was originally published at 2:25 p.m.