|SoFi is a personal finance company|
Social Findings Inc. (also known as SoFi) is an online personal finance company that provides personal loans, mortgages, and student loan refinancing. SoFi, based in San Francisco, is one of the fastest growing startups in the personal finance industry, with revenue rising 67% year-over-year to $134 million in the second quarter. It also funded $3.1 billion in loans during the quarter. SoFi claims they has so far "lent over $20 billion to more than 350,000 people". Students and other people who need assistance with debt come to SoFi for help because they provide reliable loans to help with their debt problems. SoFi doesn’t have a long history because it was created in 2011 by four students who graduated from the University of Stanford. The four students who created SoFi, Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady all met while attending Stanford and created this company from personal experience of being in debt trouble from college tuition. They hoped to come up with a way to provide more affordable options for college students and other people who are in debt for education by getting alumni of Stanford to invest money into student’s educations. The company wanted to minimize defaults by targeting low-risk students to use the investments on. SoFi prides itself on being able to give students the right tools in order to pay off their education debts. By the year 2013, only two years after the company was started, SoFi funded $200 million in loans to 2,500 borrowers at the company’s 100 eligible schools.
|Mike Cagney, CEO of SoFi|
There have also been allegations directly against Cagney stating that he had inappropriate relationships with some company employees and that he has been dodging risk and compliance controls. After an investigation looking directly into Cagney and his company, it was concluded that there were accusations from more than 30 current and former employees, who said he had treated women inappropriately and had aggressively taken on risk to accelerate the company’s growth. Cagney had no response to the allegations other than to step down as CEO and leave all the damage control for the next in line to run the company. His decision to step down immediately after the allegations have raised suspicion about the CEO and his actions. A toxic workplace was created for all the female employees who were getting harassed and all the other employees who were fired over filing cases on that harassment.
Anyone that would look at this case with one of the four ethical theories of Individualism, Utilitarianism, Kantianism, and Virtue theory would easily see that the actions that have been done by Cagney and his managers are completely and utterly unethical
|Sexual harassment has been an issue for many big companies|
The stakeholders are any people who affect or get affected by the company's actions, either positive or negative. In the case of SoFi, the stakeholders would have to do with anybody who was involved in the sexual harassment allegations and improper loan allegations. Arguably the biggest stakeholder in this situation would be Mike Cagney because of his role in this whole scandal. Not only does Cagney have over thirty current and former employees saying that they were sexually harassed by him, but also managers he hired are also having allegations against them for harassment. His actions affected the company because female employees were made to feel extremely uncomfortable while at work and anybody who tried to stand up for them and report this harassment was fired or harassed as well. Also, after these allegations he stepped down from CEO, leaving someone new to be in charge who could change the whole dynamics of the company. His actions also negatively affected the thirty individuals who were harassed directly by him because it got bad enough to the point where thirty women actually reported how much he was harassing them. Another stakeholder in the company would be Brandon Charles, who was fired for his actions. Charles was trying to do the right thing in reporting sexual harassment when he saw it, but was fired because of it by the managers who he was trying to accuse. In return, Charles is planning to sue the company, which will affect anyone who is apart of the company in a negative way. Other stakeholders include anyone who was sexually harassed because they were negatively affected by the company, especially since no action was taken to prevent it from happening again. The managers who committed the sexual harassment would also be stakeholders because they were apart of the problem of the company and are still working at SoFi after all the allegations against them. The female stakeholders in this case never got any action done on their behalf after being harassed not only by their managers, but also the CEO of the company, which is putting a bad name on SoFi. In order to fix this, the company needs to fire all the stakeholders that affected the company in a negative way, like the managers who harassed and give some sort of benefits to the stakeholders who were affected by the managers and CEO's actions.
|Multiple managers were accused of improper loan paperwork|
Individualism is explained in the context of an ethical action as "Business actions should maximize profits for the owners of a business, but do so within the law" (Salazar 17). One thing SoFi aimed for was to maximize profits, but they didn't always do it in a legal way. There were many reports against SoFi and Cagney stating that the company had improper loan paperwork that was giving the company more money then they should've been receiving from people in debt. It wasn't just one person who recorded improper loans, but multiple managers did it and were reported doing it by some of the coworkers and no action was taken against them, just like for the sexual harassment allegations. An individualist would not think this situation is ethical because although the company is making a great deal of profit, they are not doing it within the law. SoFi has been very successful in the past and did not need to start using improper loan paperwork's to earn a profit because they were already profitable, but let success and power get in their heads and tried to earn even more of a profit, but in an illegal way. One way they can turn this around is to just start doing what they were doing before the improper loan paperwork started because it was working and the company was still making a profit. An individualist would have to say that SoFi is completely unethical for their actions in trying to achieve high profits for the company for the sole reason that they did it in an illegal way.
As stated in the Case Manuel, Utilitarianism means "Business actions should aim to maximize the happiness in the long run for all conscious beings that are affected by the business action" (Salazar 17). This company's actions was the complete furthest from a utilitarian viewpoint because in the end nobody was happy with how the company's actions affected them. Mike Cagney is stepping down sooner than he wanted to too avoid responsibility for his actions, making it so he can't end his career at SoFi the way he wanted to. His actions did not help the company in the long run because he only cared for the short run profits and making himself happy, but got called out for his sexual harassment incidents and improper loan paperwork. None of the stakeholders who were sexually harassed were happy with the company's actions because nothing was done to stop this from happening in the future and most of the managers who committed the harassment are still working at SoFi. These workers have to stress over going to work and wondering if they are going to be sexually harassed while working every day and that is why a utilitarianist would declare this action extremely unethical. Brandon Charles was also screwed over in the long run by the companies actions because he was fired and lost his job and it is much harder to find another job after you've been fired once. Charles was only trying to do the right thing and bring happiness to his female coworkers by reporting the sexual harassment, but in the end, was fired for his actions and the employees who did the harassment were able to keep their jobs.Any utilitarian would be extremely disappointed with SoFi's actions because in the end, nobody was happy with the outcome of the companies actions.
Anyone who follows Kantianism believes that one should "Always act in ways that respect and honor individuals and their choices. Don't lie, cheat, or manipulate or harm others to get your way. Rather, use informed and rational consent from all parties" (Salazar 17). SoFi did just the opposite of what a Kantian believes by lying and cheating some of their customers by making improper loans and harmed other employees by sexually harassing them. Nothing about SoFi's actions was honorable, especially since the CEO decided to step down in the middle of these allegations instead of dealing with the problems he created. The managers and CEO showed no respect to their female coworkers by constantly harassing them and making them feel uncomfortable at work. Another concept of Kantian ethics is the Formula of Humanity. The Formula of Humanity is described as to act in such a way that you treat humanity, whether in your own person or in the person of another, always at the same time as an end and never simply as a means. This means that a Kantian believes that one should not ever be unfair or treat others poorly. SoFi went against this by treating employees unfairly with the sexual harassment and treating customers unfairly by writing improper loans. A Kantian would deem SoFi's actions as unethical in every way possible.
According to the Case Manuel, a Virtue Theorist believes that one should "Act so as to embody a variety of virtuous or good character traits and so as to avoid vicious or bad character traits" (Salazar 17). The four primary virtues that any virtue theorist examines are prudence, justice, temperance, and courage. If a company or person shows these four character traits they are looked at as ethical to a virtue theorist. In the case for SoFi, they did not use prudence when making a decisions because they knew the action of making improper loans was wrong and illegal but did it anyway to try and earn more profit. The people working at SoFi were not shown justice after the companies action because after all the sexual harassment allegations nothing was done to stop the harassment and the only thing that did happen was the people who reported the harassment got fired. The managers and CEO also showed no signs of temperance as they constantly harassed women that they worked with because they had the power to do it and get away with it. This is a really bad look on the company that needs to get fixed as soon as possible to repair how the company looks. The last character trait a virtue theorist examines is courage. Courage is something Brandon Charles showed when he tried reporting the managers for their deviant actions, but got fired in the end, which was a cowardly move by the company. SoFi's actions failed all four of the character tests that a virtue theorist examines and therefore is unethical.
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