Lending Club stock drops as DOJ launches investigation
Embattled Lending Club disclosed late Monday that it has received a grand jury subpoena from the U.S. Department of Justice over issues related to the ouster of its former chief executive and chairman Renaud Laplanche on May 9.
The company, which makes consumer loans over an online marketplace, disclosed the subpoena in its first-quarter earnings report, which was delayed after Laplanche’s exit.
Lending Club said Laplanche resigned after an internal board review found that the company sold $22 million in loans to a single institutional investor, “in contravention of the investor's express instructions.”
Prosper Marketplace, also based in San Francisco, has met with Fortress Investment Group about potential capital injections, Bloomberg reported Tuesday.
Social Finance, a privately held San Francisco company better known as SoFi, has started a hedge fund to invest in loans made over its own platform and potentially others.
In a statement, Lending Club said, We are not surprised to receive a Department of Justice subpoena in light of our public disclosures and the focus of the Department on financial services.
In a statement, Lending Club said, We are not surprised to receive a Department of Justice subpoena in light of our public disclosures and the focus of the Department on financial services.