For the month of July, any SoFi customer who took out a home loan could receive free daily delivery of avocado toast. The lighthearted offer followed online chatter about an Australian real estate developer who suggested that millennials struggle to save down payments on houses because they pay $19 for avocado toast.

Weeks later in August and September, the financial-services company with nearly 200 employees in its Healdsburg office was hit with three lawsuits, one filed in Sonoma and two in San Francisco superior courts. Former employees of Healdsburg-based SoFi Lending or Social Finance (both known as SoFi) alleged sexual harassment, discrimination, retaliation for reporting sexual harassment in the workplace, defamation of the reporting employee, failure to provide meal periods, and other wage-and-hour violations. The wage-and-hour lawsuit seeks to form a class action.

The allegations in the lawsuits clash sharply with the company’s image of coolness as it markets financial services to graduates of top-tier colleges. SoFi’s Healdsburg offices, with open, relaxed décor and employees’ bikes propped along some walls, resemble the offices of high-tech companies in the SoMa (south of Market) neighborhood of San Francisco. Many employees regularly wear SoFi T-shirts.

On Sept. 14, Social Finance answered the wage-and-hour lawsuit, denying each allegation specifically, and seeking costs and attorney fees. Social Finance is represented by attorneys Felicia Reid and Christin Lawler in the San Francisco-based Hirschfeld Kraemer law firm. Plaintiffs in the wage-and-hour claim — Sean Pullen, Christina Cane, Michael Carrera, Matthew Taylor and Yulia Zamora — actually worked for SoFi Lending and not Social Finance, the company said in its answer. The case is scheduled for case-management conference in January 2018.

“Plaintiffs, or any individual they seek to represent, failed substantially to comply with all the directions of Defendant (including those directions regarding work schedules and taking meal and rest breaks), and such failure proximately caused the alleged losses for which relief is sought,” according to the SoFi answer. Employees are instructed to report any alleged improper or illegal activity, the answer stated. “To the extent Plaintiffs or any other putative class member(s) failed to avoid losses by reporting the same, they cannot now recover for such alleged loss.”

Maze of LLCs, corporations

Since its founding in 2011, SoFi registered several corporations and limited-liability companies in California, including: Social Finance, SoFi Lending, SoFi Wealth, SoFi Securities, SoFi Capital Advisors and SoFi Professional Loan Program. The various entities reflect the company’s rapid expansion into different business lines in financial services. LLCs are managed by Social Finance corp. SoFi Mortgage was formed in June 2014 then dissolved three months later. SoFi has offices in Healdsburg, San Francisco, Cottonwood Heights near Salt Lake City, and Delaware.

A few years ago SoFi created more than two dozen limited-liability companies using names of colleges nationwide with Social Finance Inc. as member-manager. For example, SoFi Fund for the Columbia University Community, LLC, was registered in Delaware in Feb. 2013 and cancelled in Oct. 2014. There were similar SoFi LLCs for Harvard University, MIT, Stanford University, Yale and University of California Berkeley. The company’s business model targeted high-earning graduates of college, initially to refinance their student loans then bring them an array of other financial services.

The privately held company grew fast, with numerous rounds of venture-capital funding and recent estimated valuation of about $4 billion. According to a statement from Val Hale, executive director of the Utah Governor’s Office of Economic Development in March 2016, “to date the company has lent more than $8 billion in mortgages, student loan refinancing and personal loans to over 125,000 members.” The statement indicates that the company also had offices in New York, Washington, D.C. and Helena, Montanta. “SoFi has indicated that the project will create up to 400 jobs over the next five years,” Hale said.

Allegation: One-on-one mentorships

The most recent lawsuit, filed Sept. 21 in Sonoma County by plaintiff Yulia Zamora, alleged sexual harassment, discrimination and retaliation. Zamora worked as a “reviewer one” at SoFi from Oct. 2015 to Oct. 2016, according to the complaint. Zamora’s lawsuit alleged that Adam Cobb, director of operations in the Healdsburg office, “offered to promote female employees through ‘one-on-one mentorships’ with himself,” the lawsuit alleged. “He was notorious within SoFi for making sexual comments toward female co-workers and then becoming resentful and retaliatory when they did not return his feelings.” The lawsuit alleged a company culture that allowed sexual harassment.

“Plaintiff was distressed by Cobb’s uninvited and unwanted sexual advances,” the Zamora lawsuit alleged.

On Sept. 22, SoFi commented on Zamora’s lawsuit: “We take any allegations of sexual harassment seriously,” said Jim Prosser, SoFi’s San Francisco-based vice president of communication and policy, in a written statement. “While we can’t comment on the specific allegations in this lawsuit, harassment of any kind has no place at SoFi. The board and management of SoFi are committed to creating a culture where employees can thrive.”

The Zamora lawsuit and two others were filed by attorney Robert Ottinger, based in San Francisco. The allegations have not been proven.

The allegations in the lawsuits contrast sharply from the cool, hipster, T-shirt-wearing image the company adopted since its founding in 2011 by Stanford students, including former SoFi CEO Michael Cagney, whose name was added to the amended complaint about retaliation and defamation on Aug. 31. Following the filing of two of the lawsuits, Cagney resigned both CEO and board positions on Sept. 11.

Cagney: Transparency and alignment

In an online note sent to employees Sept. 1 under the subject “Litigation and our culture,” Cagney wrote, “Team — SoFi is based on the values of speed, transparency and alignment.

“To that end, I have some thoughts to share with you related to the two lawsuits filed earlier this month.”

Cagney wrote that “the same lawyer has been trying to collect information relating to alleged sexual harassment at the company, and that he has several people who are prepared to formally allege they were the victims of or witnesses to improper activity at our Healdsburg operations office.

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

Following Cagney’s resignation, executive chairman Tom Hutton assumed the role of interim CEO of SoFi, according to the company’s announcement on Sept. 15. “There is no more important work than paving the way for future success by building a transparent, respectful and accountable culture,” Hutton said in a statement. Hutton, an early investor in SoFi who joined the board in 2012, is managing director of XL Innovate, a venture-capital firm based in Menlo Park.

SoFi has two offices in Healdsburg: 375 Healdsburg Ave., focused largely on mortgage lending; and 405 Healdsburg Ave., about half a block away, focused on personal and student loans. In his amended complaint for retaliation, defamation and slander filed Aug. 31 in San Francisco court, plaintiff Brandon Charles alleged that “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.” Brandon alleged that he was vilified for reporting sexual harassment at SoFi.

Allegation: sexually charged environment
Charles, who moved to another state, according to Ottinger, alleged in the lawsuit that he became aware that a SoFi manager, Michael Phillips, openly discussed a specific sexual activity with a younger, female subordinate. He claimed the same manager asked another female subordinate to bring him a sex lubricant. Charles’ lawsuit states he reported the conduct to the head of human resources in San Francisco and was terminated several weeks later.

“This corporate culture fosters an environment where male executives are emboldened to treat female employees as second-class citizens, subjecting them to blatant gender bias and a sexually charged work environment,” the lawsuit alleged.

The company’s answers to the retaliation and defamation complaint from plaintiff Charles and the most recent sexual harassment lawsuit from plaintiff Zamora had not been filed. SoFi spokesperson Prosser sent this comment about the Brandon Charles case: “Mr. Charles’ claims were investigated in depth by the company and found to have no merit. We will vigorously defend ourselves against any claims otherwise.”

SoFi Lending was registered as a California corporation in January 2012. In December 2016, the company listed its principal executive office on Letterman Drive in San Francisco, with Saturnino Sixto Fanlo as CEO and president, Robert Lavet as secretary and Jennifer Fern Smith as CFO.

Eight months later in August, SoFi Lending changed its principal executive office to 375 Healdsburg Ave., in Healdsburg, with its mailing address remaining in San Francisco. The company also changed its CEO and president from Fanlo to Cagney, the company co-founder who resigned on Sept. 11. Lavet remained as secretary and serves as general counsel for SoFi, according to the company website. Cagney, who attended Stanford University Graduate School of Business, was made CFO, replacing Jennifer Smith, then Cagney resigned all his positions on Sept. 11, according to Prosser.

SoFi a ‘great place to work’

North Bay Business Journal reached Jennifer Smith on Sept. 21 in SoFi’s Healdsburg office, where she works as senior mortgage loan consultant. Smith recently married and changed her last name to Anderson. She has worked for SoFi for about three and a half years, including more than two years in Healdsburg, with a total of about 20 years in mortgage-related employment including at Washington Mutual, National City Mortgage and Wells Fargo Home Mortgage. Smith Anderson was licensed in 2014 by the California Dept. of Business Oversight as a mortgage-loan originator.

“I have pretty much worked everywhere,” she said. The SoFi mortgage department is “filled with excellent, excellent talent,” Smith Anderson said, “people I have worked with for 20-plus years — a lot of great loan originators. It’s a startup. I’ve never worked for a startup. It has been a really great experience — the innovation, how they do things differently. It has been a real launching point for my career. I have been able to help more people buy homes than ever before. Products just innovative. It has been really great. Loved it. Great place to work.”

Smith Anderson did not comment on lawsuits against SoFi. “I don’t work on that side, the student-loan personal-loan side, which is quite a different animal and a different department. I don’t pay attention to the other side very much,” Smith Anderson said. “They are separate departments, different management. I don’t run the department,” she said of mortgage operations in Healdsburg.

Smith Anderson also did not comment on why she was named CFO of SoFi Lending in December then replaced by Cagney in August; her title changed in the state filing to vice president and director. In June 2014 she was listed as secretary of SoFi Mortgage when it was formed; the company was dissolved three months later in Sept. 2014. She referred questions about SoFi business structure and its various entities to Scott Williams, chief compliance officer, who referred calls to spokesman Prosser.

“SoFi is a modern finance company fueling the shift to a bankless world,” according to a statement from the Utah governor’s office in 2016. “We’ve replaced the impersonal, transactional bank experience with a long-term partnership, enabling our members to realize the full potential of their money, careers and relationships. Our members constantly push the limits of what life has to offer.”

James Dunn covers technology, biotech, law, the food industry, and banking and finance. Reach him at: james.dunn@busjrnl.com or 707-521-4257