via Wall Street Journal
Parker Conrad has resigned as chief executive of health-insurance brokerage Zenefits after coming under fire for what the highflying startup says was inadequate compliance procedures and internal controls.
The company, which last May was valued at $4.5 billion just two years after Mr. Conrad founded it, said Monday that David Sacks, the chief operating officer, would take over.
In a strongly worded letter to employees announcing Mr. Conrad’s departure, Mr. Sacks criticized the culture and business practices created by his predecessor. “The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong,” Mr. Sacks said in the letter. “As a result, Parker has resigned.”
Mr. Sacks said the company has hired an auditing firm to review the company’s procedures around insurance licensing after reports that Zenefits may have flouted state regulations. He also has hired a new chief compliance officer, Josh Stein, a former federal prosecutor.