This was someone willfully, knowingly committing many (hundreds? thousands?) of felonies in the interest of making money and growing the company.
Inadequate process controls means employees were supposed to follow the law but things slipped through the cracks sometimes. Seems that happened a lot in Washington. But I'm pretty sure most of Zenefits' business is in CA. I would assume the brokers for most sales were licensed properly.
In a memo to employees about the management change, Sachs didn’t dance around the company’s issues when it comes to regulatory compliance.
“The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned,” writes Sachs. “In order for us to move forward as a company, we cannot seek to hide or downplay the problem.”
http://fortune.com/2016/02/08/zenefits-parker-conrad-resigns...
* There is basically 0 credit given to the Conrad (the company's founder) in the memo. That's likely because this was a fight and not a mutual decision.
* He's giving up his board seat. When it's merely a case of needing a new CEO, you don't necessarily lose your board seat.
It seems Parker was fired, and not 'stepping down'.