"Lending Club, leading online lender, says its CEO has resigned" by Michael Corkery New York Times May 10, 2016
NEW YORK — Lending Club, one of the largest online lending services, said Monday that its chairman and chief executive, Renaud Laplanche, had resigned after an internal review showed a violation of the company’s business practices.
The company said that the case involved sales of $22 million in near-prime loans to a single investor. The company said the sale was made in a way that was against the investor’s express instructions. The company did not say how the deal defied the investor’s wishes, but added that the issue did not have to do with credit quality or pricing.
Laplanche was, in many ways, the face of the marketplace lending company. Lending Club, which he founded, was the first marketplace consumer lender to go public when it made its debut in 2014, and Laplanche frequently gave interviews to extol the virtues of this type of lending.
Since its IPO, however, the company’s shares have been on a steady decline, as Lending Club failed to live up to investors’ expectations for growth.
On a conference call with analysts on Monday, the company’s new executive team tried to assure investors that they had done a thorough job fixing weaknesses in internal controls.
The move comes as lenders such as Lending Club — which make loans to businesses and individuals and then sell them to hedge funds, pension funds, or individual investors — are struggling on Wall Street.
It's the CDO $hell game $hit just like the MBS fraud.
See: Paulson’s Palace
It's the gilded age all over again.
The company also reported a profit of $4.1 million for the first quarter that ended March 31.
Despite Lending Club’s profit in the quarter, the company faced trouble funding its loans in the capital markets, as investors grew wary about potential credit problems....
NDU: Lending Club gets subpoena from Justice Department