SoftBank Group Corp. brought on AIG’s former legal operations chief Aaron Katzel as chief operating officer of legal and compliance, as the company changes over its compliance leadership.
Two people familiar with the matter confirmed Katzel’s position, which is also listed on his LinkedIn profile. They said that the COO role supporting the work of SoftBank’s legal and compliance teams is new for the company.
The Japanese conglomerate also announced last week it had made other changes to its global compliance function. It promoted deputy general counsel Timothy Mackey to group compliance officer, shortly after former compliance chief Chad Fentress left the company.
According to Bloomberg News, Fentress left his position as a board member of WeWork around the same time. SoftBank previously invested billions into the New York-based coworking company.
Bloomberg also reported recently that SoftBank, known for its behemoth Vision Fund, is mulling going private shortly after selling its chip division Arm Ltd. to Nvidia Corp. for $40 billion.
Katzel was previously the head of the legal operations center at insurance company American International Group Inc., where he worked for 10 years. On Sep. 3, he filed suit against his former employer in the Southern District of New York. The complaint, which also names Peter Solmssen and Lucy Fato, AIG’s former and current general counsel, respectively, alleges Katzel was fired illegally in May 2017 after blowing the whistle on the company.
According to the complaint, Katzel was fired months after he raised ethics and compliance concerns to AIG over the scrapping of a plan to turn the company’s legal operations center into an independent business, claiming that internal teams presented misleading information and shared confidential information with rival companies. Katzel now seeks more than $5 million in relief and damages.
The company has denied the allegations. Katzel previously filed similar complainta with the Occupational Safety and Health Administration, but the case was dismissed.
“We look forward to demonstrating, yet again, that Mr. Katzel’s claims have no merit,” an AIG spokesperson said.
Katzel declined comment on the suit and his move to SoftBank through a spokesperson.
A former Big Law attorney at Willkie Farr & Gallagher and Sullivan & Cromwell, Katzel joined AIG in 2006 and served as both a deputy general counsel and chief of staff to former AIG general counsel Thomas Russo before heading the AIG Legal Operations Center.
In October 2015, AIG announced it would create The Legal Operations Company, which Katzel told Bloomberg Law at the time would use AIG’s market research and data to help companies, particularly those with $300 million or more in annual legal spend, work more efficiently with outside counsel and set competitive pricing.
Katzel’s move to Softbank could be a sign of what’s to come for legal departments in the Covid-19 era. After the Great Recession, some larger law departments added new operations positions for the first time in an effort to use data to cut the cost of legal work.
The same trend may repeat itself as companies look for new ways to save money amid a slowing economy.
Brian Baxter contributed to this report.
To contact the reporter on this story: Ruiqi Chen in Washington, D.C. at rchen@bloomberglaw.com
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