Troubled startup Zenefits has settled with five more states for allegedly selling insurance without proper licensing

As CEO David Sacks continues to pull his troubled startup, Zenefits, out of its nose dive, the company is making progress putting its legal woes behind it. The company said on Tuesday that it reached settlement agreements with five states.

The insurance broker and HR software company did not reveal how much it paid out to each state to resolve potential fines and compliance issues relating to its past business practices, except to tell us “the penalties are fair and generally all in line with each,” according to a spokesperson.

The five states that Zenefits settled with are Arizona, Delaware, Minnesota, New Jersey, South Carolina. Tennessee, which previously settled with Zenefits, was the first state to do so for $62,500.

The settlements relate to the company’s admissions earlier this year that under its previous founder CEO, Parker Conrad, it may have been selling insurance without being properly licensed. Conrad abruptly left the company in February, and Sacks, an investor and its COO, took over as CEO.

Zenefits was previously known as one of the highest-flying, fastest growing startups in the Valley, having raised $580 million at a $4.5 billion valuation. With all that money, it began hiring like crazy and between that and its party culture, it spun out of control.

Still not California settlement

With his promotion to CEO, Sacks cleaned house among top leadership, implemented compliance controls software based on Salesforce, laid off some staff, banned alcohol at the office and settled with investors in an usual arrangement that gave some of them more equity while downgraded the valuation to $2 billion.

Zenefits’ implosion has been likened to another once high-flying startup Theranos, but Sacks takes issue with this comparison pointing out that Zenefits ‘fessed up to its problems, faced them, made changes and is now making amends.

These settlements are a step in the right direction, but the company has still not announced a settlement with California, the trickiest one. That’s because Zenefits has accused Conrad of created a program that may have let employees skirt the law when studying for their licenses in that state.

Meanwhile, Sacks has stayed visible, eager to talk about the turnaround. He’s now making the rounds at the fall slate of tech conferences, including TechCrunch’s Disrupt on Tuesday. He’ll also be speaking at Salesforce’s massive conference, Dreamforce.

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