More has been revealed from the internal probe of Lending Club’s business practices.
Apparently the company’s former chief executive of LendingClub Corp. Renaud Laplanche, borrowed from the online lender to inflate the company’s volumes.
Loan volumes are a key metric for investors to determine online lenders’ value and when you have your own CEO doing it to boost volume, it’s certainly not a good thing. Especially because this was before the company announced a major capital raising from outside investors.
Laplanche’s departure in May came shortly after LendingClub launched the review over unrelated loan irregularities.
The company reported today that the company had uncovered new information, including that Laplanche and three of his family members took out loans from LendingClub in December 2009.
This was before the company announced a major capital raising from outside investors.
A spokesman for Laplanche declined to comment.
LendingClub also announced it was cutting its workforce by 12 percent, or 179 jobs, and that interim CEO Scott Sanborn would replace Laplanche at the helm. Hans Morris, who had been interim executive chairman, will take the role of chairman.
Disclaimer: We have no position in LendingClub Corp. (NYSE: LC) and have not been compensated for this article.