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Riding Record Valuations, Fintech Companies Keep Hiring Lawyers

Aug. 25, 2020, 8:51 AM

Robinhood Markets Inc. and Stripe Inc. have recruited dozens of lawyers in 2020 as U.S. regulators recognize how financial technology is transforming financial services.

Both companies could also pursue initial public offerings that would increase their need for in-house legal and regulatory experts.

Robinhood announced Aug. 19 its addition of two new deputy general counsel after closing a funding round that raised $200 million, pushing the Menlo Park, Calif.-based stock trading startup’s valuation to a record $11.2 billion. Robinhood has been advised on its fundraising by Fenwick & West.

Orrick, Herrington & Sutcliffe took the lead for Stripe on $600 million in fundraising in April that valued the San Francisco-based company at $36 billion. Stripe, which helps businesses accept online payments and last year expanded into lending, hired former Voya Financial Inc. chief legal officer Patricia “Trish” Walsh as general counsel earlier this year, replacing Jon Zieger.

Walsh didn’t respond to a request for comment. A Stripe spokesman confirmed the company’s addition of roughly 20 lawyers, including Walsh, so far this year. Stripe declined to discuss its new legal recruits, which an analysis of LinkedIn profiles and various state and foreign bar registries reflects a desire to expand the company’s international footprint and strengthen its regulatory capabilities.

Lee Udelsman, head of in-house recruiting at legal consultancy Major, Lindsey & Africa, isn’t surprised by Robinhood and Stripe’s legal hiring. “As the workforce grows younger, perhaps new investors are favoring these online platforms as compared to the more traditional, larger investment houses,” he said.

Despite the economic downturn this year, merger activity in the fintech space has been robust. Visa Inc. agreed to acquire Plaid Inc. in a $5.3 billion deal announced in January that was followed by Intuit Inc.’s $7.1 billion acquisition of Credit Karma Inc. and Social Finance Inc.’s $1.2 billion buy of Galileo Financial Technologies Inc. In June, Mastercard Inc. paid $825 million to acquire Finicity Inc.

Robinhood’s new legal deputies—Christina Lai and Lucas Moskowitz, who both also hold the title of vice president—report to chief legal officer Daniel Gallagher Jr., a former Wilmer Cutler Pickering Hale and Dorr partner and SEC commissioner who joined Robinhood in May.

Moskowitz will oversee regulatory, litigation, and government affairs. He previously worked with Gallagher at WilmerHale and the SEC, where he was chief of staff to SEC Chairman Jay Clayton.

Lai is a former deputy general counsel at Yahoo! Inc. who most recently served as vice president of corporate legal affairs and corporate secretary at semiconductor manufacturer Applied Materials Inc.. Lai will oversee Robinhood’s corporate, commercial, product, and privacy teams and in the additional role of corporate secretary “enhance” its disclosure policies and practices, the company said.

In addition to Lai, Moskowitz, and Gallagher, Robinhood has hired at least six more lawyers this year as it builds out a legal, regulatory, and public policy team ahead of a potential IPO. A company spokesman declined to discuss hiring numbers.

Robinhood, no stranger to regulatory attention, is reportedly facing inquiries from the SEC and FINRA.

On Aug. 14, Robinhood retained four lobbying firms—Blue Ridge Law & Policy, Daly Consulting Group, Thorn Run Partners, and the Williams Group—to advise on “general securities law,” according to congressional filings. Robinhood’s in-house public policy counsel is Kirtan Mehta, who joined the company last year after serving as director of federal affairs for New Jersey Gov. Phil Murphy (D).

In May, Robinhood hired a new head of privacy in Michael Hauser, who spent the past two years in the same role at Pinterest Inc.

More Fintech Recruits

Among the notable lawyers hired by Stripe are new regional regulatory leaders.

Stripe added Deborah Im, most recently a Singapore-based deputy head of Asia-Pacific legal at Facebook Inc., in the same role this month. Stripe also hired Facebook associate general counsel for regulatory Catherine Lee in July as a privacy counsel in San Francisco.

Latin American regulatory counsel Rodrigo Sanchez Mujica in Mexico City joined Stripe in March from online marketplace Mercado Libre Inc., where the former Milbank, Tweed, Hadley & McCloy associate was a legal and regulatory strategy manger. In January, Stripe hired David Ferri, a former head of legal for Europe, the Middle East, and Africa at PayPal Holdings Inc., as a London-based regulatory head.

Stripe, which earlier this month hired General Motors Co.’s former CFO, also brought on an Americas regulatory head this year in Gerald Tsai, who spent the past six years as head of fintech for the Federal Reserve Bank of San Francisco.

Others recent fintech in-house additions include:

  • Clearwater Analytics LLC, a fintech software provider owned by private equity firm Welsh, Carson, Anderson & Stowe, announced its hire of Genpact Ltd. managing senior counsel Alphonse Valbrune as chief legal officer.
  • Gusto Capital LLC, a cloud-based payroll startup formerly known as ZenPayroll Inc., announced its addition of former Netflix Inc. and eBay Inc. lawyer Alyssa Harvey Dawson as its first-ever general counsel.
  • Tempoe LLC, a Cincinnati-based retail fintech company, saidit hired Taft Stettinius & Hollister business, finance, and real estate partner Regan Schmidt as general counsel, chief compliance officer, and corporate secretary. Schmidt holds the same role for Tempoe affiliate SmartPay Leasing LLC.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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