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
Mike
Cagney, CEO and cofounder of SoFi, resigned as the company’s
chairman on Tuesday.

Thomson
Reuters


Social Finance has gone on the defensive following reports
that problems within the internet financing company may go well
beyond its cofounder, Mike Cagney.

Cagney on Monday resigned
as chairman
 and announced he will step down as CEO
by the end of the year amid allegations of widespread sexual
harassment at the company, which is also known as SoFi. But

an article in The New York Times
 reported on Tuesday
indicated the company has more to worry about than how it treats
women and detailed a series of questionable business practices.

Later that day, the company fired back at The Times via
a
letter posted on its website
. Although it largely ignored the
reports in the The Times about sexual misconduct at the company,
SoFi disputed several points in the article concerning its
business, saying they were inaccurate. 

SoFi said it wouldn’t “address every inaccuracy in the story.”

“However,” it added, “we have some issues with the story that we
want to address.”

The article alleged that SoFi’s growth could be
attributed in part to a series of risky business lending habits.
Cagney misrepresented SoFi’s student loan products to investors
and asked customer service representatives to review and approve
personal loans, even though they were not qualified to do so,
according to the article.

But in its letter, SoFi denied that customer service
representatives ever approved loans. Instead, senior loan
officers have authority over whether to make loans, and the
company uses proprietary algorithms that look at applicants’
credit history to determine their credit worthiness, SoFi
said.  

The Times’ reporting on the role its customer service
representatives played “reflects a lack of understanding of our
business,” the company said. 

In response to allegations that the company did not sufficiently
vet incomes for mortgage borrowers, SoFi wrote, “This is an
incredibly vague claim, and we have no idea what this means.”

“Not only are we good at making loans, those loans outperform the
industry,” the company wrote.

In its letter, SoFi did not directly address charges in The Times
report that it mislead investors in 2012 about a new loan
product. According to The Times, the company told investors that
it had received $90 million in debt financing to fund the new
loan product when it actually hadn’t secured that financing. SoFi
later bought back the related loans from investors, according to
The Times. 

In addition to raising questions about SoFi’s business practices,
The Times’ article detailed multiple charges of sexual harassment
and escapades at the company.

Despite being married and having his wife work in the office with
him, Cagney pursued at least two of his female employees and sent
one of them sexually explicit text messages, according to The
Time report. The company’s chief financial officer offered to pay
a bonus to female employees for losing weight and talked aloud
about women’s breasts, according to the report. And some
employees said they’d seen colleagues at the company having sex
with their superiors, The Times reported. 

In its letter, SoFi wrote that it takes “disturbing anecdotes
about staff behavior” seriously.

SoFi is only the latest in a string of Silicon Valley companies
facing accusation of sexual harassment and hostile work
environments.

Uber cofounder Travis Kalanick was
pressured to resign
 in June from his role as the
company’s CEO after an internal investigation uncovered numerous
charges of sexual harassment. The investigation was spurred
by a blog post by a former engineer who described a
culture of sexism at the company. 

Dave McClure, founder of 500 Startups, resigned
as general partner
 of the incubator in July after The
New York Times
ran a story
accusing McClure of inappropriate behavior. A few
weeks later, Kris Duggan
stepped down from his role
as CEO of BetterWorks following a
lawsuit that claimed a hostile work environment.