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Payments Startup Brings Aboard McGuireWoods Fintech Leader

Jan. 8, 2020, 8:59 PM

A Silicon Valley-based payments company facing claims of racial discrimination and retaliation has recruited a Big Law partner to become its first in-house legal chief.

PayActiv Inc. announced Jan. 8 that David Reidy had joined the company as chief legal officer. Reidy most recently served as head of the fintech practice at McGuireWoods in San Francisco. Reidy said in a statement that he looked forward to joining PayActiv, which operates in 50 states and works with companies like Walmart Inc. in providing employees with early access to paychecks.

“Two-thirds of America’s hourly workforce, translating to more than 90 million hardworking people, are in need of financial relief between paychecks,” Reidy said. “It’s an honor to join PayActiv and support its mission of bringing financial security, dignity, and savings to millions of workers by offering financial wellness services and providing them with access to the wages they have earned.”

Reidy spent almost four years at McGuireWoods, which he joined in early 2016 after the Richmond, Va.-based law firm opened an office in the Bay Area by recruiting a team of financial services lawyers from Reed Smith.

Reidy also led the fintech practice at Reed Smith, which launched the group in mid-2015 with co-leaders Reidy and Vanessa Gage, a former partner at the firm now serving as director of legal for corporate and capital markets at San Francisco-based home sales startup Opendoor Labs Inc.

Litigation Background

While in private practice, Reidy specialized in advising financial services companies in consumer class actions and privacy, debt collection, and unfair business practice cases. He did not immediately respond to a request for comment about his new role at PayActiv, which was founded in 2014 by current CEO Safwan Shah, COO Ijaz Anwar, and chief technology officer Sohail Aslam.

In a press release touting Reidy’s hire, PayActiv said its new legal chief had already been advising it at McGuireWoods as the San Jose, Calif.-based company sought to expand domestically and globally with an eye on becoming “an industry leader in earned wage access.”

McGuireWoods said in a statement of its own that it expected the relationship between it and PayActiv to continue. Reidy and the firm have advised PayActiv since 2018, the firm said. Dion Hayes, deputy managing partner for litigation at McGuireWoods, said in a statement that Reidy’s “ability to help companies overcome hurdles and advance their innovations will serve PayActiv well.”

PayActiv was sued for racial discrimination and harassment in July by Pedro Ibarra, a former operations director at the company, who claims he was fired after blowing the whistle on potential predatory lending practices and the handling of customer data.

Ibarra’s lawsuit, filed in state court in California, also alleges that he was terminated for raising concerns about whether PayActiv should be regulated like a traditional payday lender. Court filings show that Littler Mendelson is representing PayActiv in the case.

In September, PayActiv became a public benefit corporation.

The company’s website lists a half-dozen outside advisers, including attorney JéAnna Abbott, a professor at the University of Houston specializing in hospitality business law, organizational behavior, conflict management, and negotiations.

A LinkedIn profile for Sridevi Sunderaj-Anwar, an attorney registered to practice law in Minnesota, shows that he has served as PayActiv’s chief compliance officer.

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

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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