September 15, 2017 / 4:32 PM / 7 days ago

SoFi CEO Cagney to step down immediately

Mike Cagney, CEO, Chairman and co-founder of SoFi, speaks during the TechCrunch Disrupt event in New York City, U.S., May 16, 2017. REUTERS/Brendan McDermid

(Reuters) - Online lender Social Finance, which is currently investigating claims of sexual harassment by employees, said on Friday its chief executive, Mike Cagney resigned, effectively immediately.

The company had said on Monday that Cagney would step down, but stay on as CEO until a successor was found.

Executive Chairman Tom Hutton will become interim chief executive officer, the company said on Friday.

Cagney's resignation comes after the San Francisco-based company known as SoFi launched an investigation this month into claims that current and former employees were sexually harassed at work. (reut.rs/2f0fEte)

A former Wells Fargo trader and hedge fund manager, Cagney co-founded SoFi in 2011 to compete with banks in the student loan market.

SoFi targeted students from elite institutions such as Stanford and Harvard and young people skeptical of traditional banks in the wake of the financial crisis flocked to the new platform.

In a note to employees on Monday, Cagney said “a combination of HR-related litigation and negative press have become a distraction from the company’s core mission” to focusing attention on him personally.

SoFi has a non-traditional work culture, hosting cocktail parties, yoga sessions and singles meetups for its customers, which it refers to as members.

The company’s recent woes echo problems elsewhere in the technology sector.

Ride-hailing company Uber, also based in San Francisco, is struggling to overcome allegations of sexual harassment and executive misconduct. Venture capitalists have also faced criticism over their treatment of female entrepreneurs.

Reporting By Aparajita Saxena and Diptendu Lahiri in Bengaluru; Editing by Shounak Dasgupta and Sai Sachin Ravikumar

Our Standards:The Thomson Reuters Trust Principles.
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