Lending Club Says Ex-CEO Inflated Company’s Volumes

LendingClub loans

Online lender Lending Club said Tuesday (June 28) that its founder and former CEO borrowed from the company in what amounted to an effort to boost the reported lending volumes.

Reuters said the activities came to light in an internal probe of firm-wide practices. That review began after the much-publicized disclosure that loan irregularities tied to the executive, Renaud Laplanche, led to his resignation.

In the latest announcement, the firm said that Laplanche and three of the CEO’s family members took loans from the firm a number of years ago, in 2009. That private loan activity itself took place before the firm announced what the newswire termed “a major capital raising” that came from other investors outside the company.  Loans taken by the family were about 1 percent of the total in the quarter that ended in December 2009, and Lending Club said the loans have been repaid.

Laplanche and other employees had filed falsified documentation linked to $22 million of loans tied to a single investor. It has been reported, also, that the firm has limited withdrawals related to one of its funds; Reuters noted that those withdrawals amounted to 58 percent of that fund.

In relation to the corporate restructuring, the company will take $3 million in charges. Lending Club anticipates that loan volume will be one-third less than those seen in the first quarter of this year, when volumes amounted to $2.75 billion.