Dive Brief:

• Zenefits, HR software startup, published results of an investigation into the company's noncompliant insurance licensing program that clears current CEO David Sacks from blame, Fortune reports.
• The report, completed by an outside law firm that was hired by Zenefits, largely pins the issue on co-founder Parker Conrad, who resigned February of this year. It claims that Conrad admitted he created the noncompliant software in January, though the company's vice president of litigation and regulations, Josh Stein, first raised concerns about it in November.
• The company did not have a head of compliance until Stein was made Chief Compliance Officer – something that raised eyebrows, as benefits brokering is a highly regulated industry.

Dive Insight:

"The report paints a picture of a fast-and-loose startup whose regulatory corner-cutting has cost the company a lot," Fortune reports. Zenefits was a startup darling that had to start cutting back their massive growth scheme when they weren't meeting revenue goals. When HR Dive asked experts what tripped up the company, many noted Zenefits' singular focus on growth at the expense of culture and compliance as a key problem.

The report comes off as an attempt to strengthen current leadership by casting blame on the managerial habits of past leadership, Fortune adds, saying that Conrad's "tight grip on control" kept Sacks completely in the dark about the software and what it took for an employee to obtain a license.