Founder Renaud Laplanche resigned after an internal review found the company had extended loans to an investor that didn't conform to instructions. Fred Katayama reports.
The CEO of the world's largest peer-to-peer lender, Lending Club, abruptly resigned. CEO and founder Renaud Laplanche will be replaced by the company's president, Scott Sanborn. The online platform that connects borrowers with lenders said an internal review found that $22 million in loans extended to a single investor did not conform to that investor's instructions. And it said certain employees knew that the sale had failed to meet the investor's requirements. Lending Club said three senior managers also stepped down or were fired. Sterne Agee analyst Henry Coffey downgraded the shares and cut his price target, saying, "The news ... only heightens concerns that we have expressed over the durability of the company 'market place' funding model." The news coming in conjunction with the company's quarterly results, which showed it had swung to a profit from a loss. The fast-growing lender had sported high valuations that reflected a tech company more than a lender, but its stock has plummeted 75 percent since its peak just after debuting in December 2014, and the stock dropped sharply in early trading Monday.