LendingClub, a peer-to-peer online lending platform, has settled a securities suit over allegations that the firm and its officers made false and misleading statements on its Registration and Prospectus in connection with the firm’s December 11, 2014 IPO. Launched under the ticker symbol LC at $15 per share, LendingClub’s stock closed at $23.43 the first day. The stock would approach $26 in the coming weeks, and then fall, fall, and fall some more. This afternoon (April 19, 2018) LC closed at $3.40.
LendingClub is an online marketplace that connects borrowers and investors “to create various types of loan products for consumers and small businesses, including unsecured personal loans, super prime consumer loans, unsecured education and patient finance loans, and unsecured small business loans.” This succinct summary comes from the class action complaint. According to that same document, LendingClub made false and misleading statements about the company’s internal controls.
The precipitating cause of the suit was the May 9, 2016 SEC disclosure by LendingClub that they had sold $22 million in loans to people with low credit scores in violation a counter-party’s specific instructions; that the Chairman and CEO Renaud Laplanche (French for “the board”) failed to inform LendingClub that he held an undisclosed interest in a company called Cirrix Capital while the company was considering, at Laplanche's suggestion, investing in it; and that Laplanche resigned from the board (oh, the irony!) as a result. That very day ticker symbol LC dropped 35% to $4.62 per share.
Class members have until June 25, 2018 to file a claim. If you think you might qualify in this settlement, or in any other securities or antitrust settlement, please give us a call today.