When I first read the news when I woke up this morning I thought it must have been a joke. The CEO and Founder of Lending Club, Renaud Laplanche, has resigned. But this is not April 1 and it is certainly no joke. The person who has probably had more impact on the growth of this industry than anyone else is no longer CEO of the company he founded – it is effective immediately.
Wow. Just Wow.
There is a press release out this morning with many of the details. The board asked for Renaud’s resignation following the discovery of an improper sale of $22 million in loans to one investor. According to the press release the loans in question departed from the instructions given by this investor. The loans have since been repurchased by the company. But the impropriety did not stop there. From the release:
The review began with discovery of a change in the application dates for $3.0 million of the loans described above, which was promptly remediated. The board also hired an outside expert firm to review all other loans facilitated in the first quarter of 2016 and the firm did not find changes to data in these or other Q1 loans.
The review further discovered another matter unrelated to the sale of the loans, involving a failure to inform the board’s Risk Committee of personal interests held in a third party fund while the Company was contemplating an investment in the same fund. This lack of disclosure had no impact on financial results for the first quarter.