LendingClub CEO Is Out, Shares Tumble 25%
Lending Club said it earned $0.01 per share in the first quarter on revenue of $151.27 million. Wall Street analysts were expecting the company to earn $0.05 per share on revenue of $148.23 million.
The company also announced its Board of Directors accepted the resignation of its Chairman and CEO Renaud Laplanche. The resignation follows an internal review of sales of $22 million in near-prime loans to a single investor, which was found to be "in contravention of the investor's express instructions as to a non-credit and non-pricing element."
Scott Sanborn will continue acting as President of Lending Club and will now take on the title of acting CEO while the Director Hans Morris will assume the title of the newly created role of Executive Chairman.
"A key principle of the Company is maintaining the highest levels of trust with borrowers, investors, regulators, stockholders and employees. While the financial impact of this $22 million in loan sales was minor, a violation of the Company's business practices along with a lack of full disclosure during the review was unacceptable to the board. Accordingly, the board took swift and decisive action, and authorized additional remedial steps to rectify these issues," said Mr. Morris. "We have every confidence that Scott and the management team are well positioned to lead Lending Club forward."
"As our first quarter results demonstrate, Lending Club's business was strong despite the increasingly challenging investor environment," said Lending Club President and acting CEO Scott Sanborn. "I will work closely with our valued borrowers, investors, and business partners to drive the continued success of Lending Club, and I am excited to be leading this exemplary team."
Shares traded recently at $5.31, down 25.1 percent in the pre-market session.
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