Tags: lending club | job cuts | loans | online lender

Lending Club Cuts Jobs, Reveals More Questionable Loans by Ex-CEO

Image: Lending Club Cuts Jobs, Reveals More Questionable Loans by Ex-CEO
(AP/Richard Drew)

Tuesday, 28 Jun 2016 10:36 AM

Lending Club Corp. said it would cut 12 percent of its workforce as loan originations decline, and the online lender disclosed further loan irregularities by ousted Chief Executive Officer Renaud Laplanche.

The company also said on Tuesday that interim CEO Scott Sanborn would replace Laplanche at the top of the company.

Lending Club, whose shares have fallen about 40 percent since Laplanche's departure, also said it expected loan originations to be roughly a third lower in the second quarter than in the first quarter.

The company, which had 1,382 employees at the end of 2015, said it will take a charge of $3 million in the second quarter for the elimination of 179 jobs.

Laplanche, one of the highest-profile names in the fledgling online lending industry, was removed last month over financial irregularities at the company, which operates the world's biggest peer-to-peer lending platform.

Laplanche was not immediately available to comment.

Lending Club said on Tuesday that an internal review had found that Laplanche and his family had taken out 32 loans on the platform in the second half of December 2009 to boost the company's reported volumes for the month.

The loans totaled around $722,800, nearly 1 percent of Lending Club's total volume in the fourth quarter of 2009. All the loans have been repaid, the company said.

"The company is confident that there are no other situations in which Mr Laplanche inappropriately originated loans in his or his family's name during periods after December 2009," Lending Club said in a filing.

Laplanche's exit sent shockwaves through an industry already strained by weakening investor appetite for loans, increasing defaults and the possibility of heightened regulation.

In announcing Laplanche's departure in May, Lending Club said an internal probe had found that employees had falsified documentation when selling $22 million of loans to an investor.

Lending Club has since said that Laplanche had not disclosed his stake in a fund in which the company later made an investment.

Lending Club's shares were up 5.5 percent at $4.53 in morning trading.

Hans Morris, who had been interim executive chairman, will take the role of chairman, the company said.

© 2017 Thomson/Reuters. All rights reserved.

 
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Lending Club Corp. said it would cut 12 percent of its workforce as loan originations decline, and the online lender disclosed further loan irregularities by ousted Chief Executive Officer Renaud Laplanche.
lending club, job cuts, loans, online lender
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2016-36-28
Tuesday, 28 Jun 2016 10:36 AM
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