NEW YORK (AP) — Shares of LendingClub, which forced out its founder last week, slumped in early trading after the U.S. Department of Justice opened an investigation and the company raised fresh concerns about funding.
The idea, touted as a super-efficient method of getting capital where it's needed, was welcomed avidly by investors who sent the company's market capitalization soaring into the billions shortly after it became public in late 2014.
Laplanch left after an internal review determined that the company's business practices were violated with the sale of $22 million in loans, made to people with sketchy credit scores, to a single investor.
In a report to the U.S. Securities and Exchange Commission, LendingClub Corp. said it had identified weaknesses in its financial reporting and said its disclosure controls and procedures were not effective.
