Credit Card Startup Petal Hires New Chief Compliance Officer

Affirm Holdings Inc., a financial technology company that went public earlier this year, will see former Toyota Financial Services General Counsel Katherine Adkins take over as its top lawyer next month.

San Francisco-based Affirm, which raised roughly $1.2 billion through an initial public offering in January, announced Monday that Adkins will succeed Sharda Caro del Castillo as chief legal officer on June 30.

The company, which provides point-of-sale financing to online customers, hired Adkins after she spent a decade as legal chief for the Toyota’s captive financial services arm, the largest non-bank financial institution in the U.S. Adkins, who didn’t respond to a request for comment, spent the nearly two past years as a chief legal adviser for banking strategy at Affirm.

Affirm’s IPO generated $3 million in legal fees and expenses for the company’s securities lawyers at Skadden, Arps, Slate, Meagher & Flom, according to public filings. Davis Polk & Wardwell advised underwriters on the offering. The listing also revealed that del Castillo received nearly $2.8 million in total compensation during 2020, with more than $2.5 million of that sum in the form of stock options.

Affirm named del Castillo to be its legal chief in November 2019 following the departure of general counsel and chief compliance officer Manuel Alvarez, who is now commissioner of California’s Department of Financial Protection and Innovation.

Del Castillo’s base salary was increased last year to $385,000, up from $365,000. She sold more than $2.3 million in Affirm stock in March, according to securities filings. Del Castillo still owns nearly $1.4 million in the company’s stock, per Bloomberg data.

“I came to Affirm to help build new products that would improve people’s lives, and it has been an honor to play a role in supporting that mission while taking Affirm public,” del Castillo said in a statement to Bloomberg Law. “Decisions like this are never easy but I am excited to continue my journey of product innovation while cheering Affirm on to even greater success.”

Affirm hired del Castillo after she served as global head of payments at Airbnb Inc. She also was general counsel for the company’s payments division. Before Airbnb, del Castillo was head of payments at Square Inc. and worked at PayPal Holdings Inc., Wells Fargo & Co., and Silicon Valley Bank.

“Sharda led our legal team during a critical and historic time for our company as we conducted our initial public offering, navigated an unprecedented market period, and achieved tremendous growth,” said a statement from Affirm founder, chairman, and CEO Max Levchin, who was also a co-founder of PayPal. “She has been a trusted and valued leader, and I sincerely thank her and wish her all the best.”

Levchin, who recently spoke with Bloomberg Businessweek about Affirm’s post-IPO outlook, noted that he looked forward to working with Adkins, who will soon oversee all legal matters at the company.

The legal chief change at Affirm comes as the company’s stock price has slipped from its post-IPO high earlier this year.

Affirm’s announcement Monday of its new law department leadership coincided with the company disclosing an uptick in revenue and growing user base despite taking a $247.2 million loss in the third quarter of fiscal 2021.

New Fintech Recruits

Affirm is the latest in a series of fintech companies making in-house legal moves this year. Brex Inc., a credit card startup valued at $7.4 billion, hired its first chief compliance officer this month.

Other financial services upstarts like Robinhood Markets Inc., Stripe Inc., and Plaid Inc. have been busy bringing on new lawyers in recent months as they cope with the expanding legal needs and regulatory hurdles that often face growing businesses.

“The pandemic has accelerated the fintech space,” said Keith Gralitzer, a co-founder and managing director of legal recruitment firm Momentum Search Group LLC. Gralitzer noted that Covid-19 accelerated a need for technology that supports contactless transactions.

Lawyers working in the fintech space, from the in-house world to law firms, are “busier than ever,” Gralitzer said.

Some other recent fintech legal appointments of note include:

Katapult Holding Inc. – Another point-of-sale fintech being advised by DLA Piper as it prepares to go public by merging with FinServ Acquisition Corp., a blank-check company, Katapult said April 22 it had hired general counsel and head of compliance Tahmineh “Tammy” Maloney. The former Hogan Lovells associate has a decade of federal financial regulatory experience and she most recently spent the past two years as general counsel for E*Trade Bank.

Petal Card Inc. – A credit card startup that raised $55 million in Series C financing last year, Petal announced April 7 its hire of general counsel and compliance chief Elizabeth “Eli” Corbett, a former Alston & Bird counsel who spent nearly a half-dozen years at the Consumer Financial Protection Bureau. Corbett takes over at Petal from Parris Sanz, who left in March to become general counsel at WebBank, a subsidiary of Salt Lake City-based industrial bank Steel Partners Holdings LP.

Akoya LLC – A data-sharing and aggregation unit spun-off from Fidelity Investments, Akoya announced Feb. 4 its hire of general counsel Miriam Frieden, a former legal chief and corporate secretary for the U.S. subsidiary of Germany’s Deposit Solutions GmbH, a Peter Thiel-backed fintech platform. Frieden, who served as a volunteer for President Joe Biden’s recent presidential campaign, has previously worked in-house at JPMorgan Chase & Co., Citigroup Inc., and Mastercard Inc.

Source : https://news.bloomberglaw.com/business-and-practice/affirm-taps-former-toyota-financial-exec-as-post-ipo-legal-head

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