eBay Loses Compliance, M&A Leader As Molly Finn Leaves Legacy Of Legal & Regulatory Debacles Behind
Once celebrated as eBay's first Chief Compliance Officer, Molly Finn is departing the company after 17 years, leaving a legacy of legal and regulatory debacles in her wake.
Finn joined eBay in 2007 with a background in employment law, then worked her way up the ladder to become eBay's first Chief Compliance Officer in 2018 before being moved to Deputy General Counsel M&A and Securities in 2022.
While no explanation was ever publicly given for her change in role, it's notable that she presided over ethics and compliance during the 2019 eBay cyberstalking scandal that targeted journalists Ina and David Steiner of EcommerceBytes in a bizarre plot to try to influence their coverage of eBay and out an anonymous source and commenter, Fidomaster/unsuckEBAY.
Liz Morton
Finn's name and email address appear multiple times in privilege logs submitted in court records and then Chief Legal Officer Marie Oh Huber was also copied on executive communications that have been introduced in the case.
Seven eBay employees pleaded guilty to multiple federal felonies in the stalking scandal and the Steiners filed a ~$500 Million civil suit against those employees plus CEO Devin Wenig, Comms Chief Steve Wymer, SVP Global Ops Wendy Jones and eBay Inc. which is still ongoing.
Were there red flags and holes in eBay's ethics and compliance procedures that were missed, allowing these criminal acts to occur on Molly Finn's watch?
Liz Morton
Unfortunately, much of her correspondence in this matter is likely to remain out of the public record under attorney work product privilege, so we may never know what she knew or how she responded to emails related to these events.
What we do know is that after news of the scandal became public in 2020 and the Steiners filed their lawsuit in 2021, Molly Finn was quietly demoted from Chief Compliance Officer to Deputy General Counsel M&A and Securities in January 2022, leaving an apparent gap in eBay's compliance leadership for over a year and half.
Public records show the Securities and Exchange Commission sent a letter on September 20, 2022 with some pointed questions about eBay's April 21, 2022 Proxy Statement - including directly asking for disclosure as to whether or not eBay had a Chief Compliance Officer at that time and, if so, to whom that person reported.
Notably, it was Molly Finn who responded, using her title of Vice President, Deputy General Counsel (leaving off the M&A part), and she completely glossed over the Compliance Officer question, neither explicitly stating she no longer held that title nor confirming whether or not eBay had anyone in that role at that time.
Per the SEC's request, eBay addressed these questions in "future proxy disclosures" with the Proxy Statement filed on April 28, 2023 purporting to lay the matter to rest by stating "Our Audit Committee has an annual cadence to review the risks included in its remit, including quarterly meetings regarding ethics programs with our Chief Compliance Officer (who reports to our Chief Legal Officer, with direct access to the Audit Committee Chair)."
But who was the Chief Compliance Officer reporting to Chief Legal Officer Marie Oh Huber and supposedly having quarterly meetings with the Audit Committee from January 2022 until August 2023, when eBay officially hired Ryan Jones as their new Chief Risk and Compliance Officer?
Liz Morton
If Molly Finn was still acting in this capacity even though her title had been changed in December 2021, why was that not disclosed anywhere and if someone else occupied that role, who was it and why were they not named?
CLO Marie Oh Huber left eBay in June 2024, taking a $6.5 Million severance on the way out, after negotiating a deferred prosecution agreement with the Department of Justice which held eBay criminally liable for the cyberstalking campaign with a $3 Million fine and 3 years of enhanced compliance monitoring.
That compliance monitoring order had a curious focus on Mergers and Acquisitions, suggesting that DOJ may have had broader concerns about eBay's business practices - particularly their acquisition of collectible trading card marketplace TCGPlayer in 2022.
Liz Morton
Those concerns may have included due diligence and disclosure failures in that acquisition, which led to the formation of the first US labor union in eBay's history and the sudden departure of Chief Accounting Officer Brian Doerger in March 2023.
Liz Morton
eBay should have been able to anticipate and prepare for the possibility of facing unionization efforts following the acquisition, given that the agreement initially allowed Founder Chedy Hampson and other management personnel to remain in an environment with a documented history of "strained" labor relations which led to a previous union drive in March 2020 that received national media attention and public support from Senator Bernie Sanders.
Molly Finn directly oversaw the TCGPlayer acquisition in her role as VP Deputy General Counsel M&A and Securities and was responsible for key due diligence and risk assessment - including whether there had been a history of organizing activity or prior labor issues at the company eBay intended to acquire.
Clearly, she either failed to catch and flag the labor relations risk or she was aware of it, but failed to disclose in a timely manner - eBay didn't reveal the potential risks that unionization efforts could bring to investors until their 10-K filed on February 23, 2023, which was ~4 months after the acquisition closed, ~1 month after TCGPlayer authenticators filed their union petition, and only ~2 weeks before those workers won their vote to formally establish TCGUnion-CWA.
If Finn was still acting as Chief Compliance Officer between December 2021 and August 2023, while also holding the title of Vice President, Deputy General Counsel M&A and Securities, that would represent a significant conflict of interest.
The Chief Compliance Officer typically serves a crucial function in the due diligence and risk assessment process and keeping the company's compliance efforts independent from its business strategies would be critical to ensure transparency reporting, regulatory filings, and stakeholder communication were handled properly both pre and post merger.
Allowing the same person to serve as both VP of M&A and Compliance Officer could potentially create conflicts that may affect the accuracy of financial disclosures and effectiveness of internal controls.
Molly Finn's due diligence failure has been the source of major corporate crisis and investor concerns as it has exposed the company to multiple National Labor Relations Board claims and increased legal and regulatory scrutiny.
Spurred on by outcry over stealth changes eBay made to their Human Rights policy to strip previous mention of respecting workers' rights to organize, investors nudged eBay to conduct a "Values Assessment" in 2024 to determine if the company was living up to its publicly posted ethics and values statements.
eBay's hand-picked third party assessor, Davis Wright Tremaine LLP, found the company operates in line with their published Human Rights Policy and other values statements - an unsurprising result considering eBay preemptively excluded topics related to employees' working conditions, pay or benefits from the assessment.
Liz Morton
After delaying bargaining with TCGUnion-CWA for over 600 days, eBay has escalated their union-busting tactics by laying off over 200 unionized workers at TCGPlayer, announcing they are moving the authentication operations to a new location in Kentucky, and allegedly calling in unnamed private security guards to harass the workers on their way out.
Liz Morton
These latest actions have resulted in additional unfair labor practice claims being filed with NLRB and brand damaging national publicity for eBay - all of which could have potentially been avoided if Molly Finn had done proper due diligence on the acquisition so that labor relations issues at TCGPlayer would have been flagged, disclosed and handled much earlier in the process before they escalated to this point.
Finn's LinkedIn profile underwent one other interesting recent change before she announced her departure, removing M&A from her title and instead moving it to her job description, which also now includes the fact that she led eBay's antitrust legal work.
That's a particularly ironic update, since the acquisition of TCGPlayer has now also exposed eBay to increased scrutiny and a potential FTC investigation for alleged deceptive and anti-competitive business practices.
Liz Morton
Finn has not yet announced what's next for her but after presiding over apparent compliance lapses in the largest corporate scandal in the company's ~30 year history and a massive due diligence debacle turned labor relations and PR disaster at TCGPlayer, it's safe to say eBay will be cleaning up the mess left behind for quite some time.
