Lending Club Announces New CEO, Workforce Reduction Plans

One of the most hard hit stocks over the past few months has been LendingClub Corp LC after the company saw its CEO Renaud Laplanche resign in May.

LendingClub's board of directors oversaw an internal review of $22 million in sales of near-prime loans that Laplanche conducted.

LendingClub's stock traded as high as $17.52 over the past 52 weeks, but is currently sitting below $5 per share despite a more than 6 percent rally in the stock on Tuesday.

Tuesday's rally followed the company's announcement that it named a new CEO and an organization restructuring.

New CEO

LendingClub's board of directors named Scott Sanborn as its new CEO and president. Sanborn has been with LendingClub for six years and previously held the roles of president, chief marketing officer and chief operations officer. Prior to joining LendingClub, he was the chief marketing and revenue officer for eHealth Insurance and also worked at RedEnvelope and the Home Shopping Network.

"Scott and the management team have demonstrated they can lead Lending Club through this turbulent time," said Hans Morris, LendingClub's chairman of the board of directors. "The board has decided this is the right time to hand full responsibility over to Scott in his role as the CEO. With today's announcements and Scott at the helm, Lending Club is now in a position to move forward."

Organizational Changes

LendingClub also announced that it will reduce its workforce by 179 positions to reflect lower loan volumes in the second quarter and the fact that regaining investor confidence may take time.

"We have demonstrated the power of the Lending Club marketplace model to generate attractive, risk adjusted returns to investors," Sanborn also said in the press release. "We are working closely with investors to rebuild confidence and are encouraged to see them returning to the platform."