The hottest new club in Silicon Valley is the regulatory compliance office.

Zenefits is fast-growing human resources company that received a staggering $4.5 billion valuation last May after barely two years in business. On its site, it touts the fact that Forbes called it “the hottest startup of the year.” 

And, on Monday, it shocked the startup world on Monday night by announcing that its founding CEO had resigned over “compliance failures.” 

As far as these things go, it was a spectacular exit: to fix its image quickly and thoroughly, the company appointed no less a Silicon Valley patriarch than Peter Thiel, one of the most respected people in technology. (As a rule: the more famous the new board member, the bigger the scandal they’re being sent in to fix.) Read more…