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LendingClub Plunges Another 12% Amid Dept. Of Justice Subpoena

LendingClub Plunges Another 12% Amid Dept. Of Justice Subpoena

Shares of LendingClub Corp (NYSE: LC) were trading lower by 12 percent early Tuesday morning, essentially erasing Monday's 12 percent gain after the company confirmed in a regulatory filing that it received a grand jury subpoena from the U.S. Department of Justice.

LendingClub dominated headlines earlier this month after the company announced the resignation of its CEO Renaud Laplanche following an internal review of sales of $22 million in near-prime loans to a single investor.

Related Link: LendingClub CEO Is Out, Shares Tumble 25%

LendingClub noted in a regulatory filing Monday afternoon that in addition to the Department of Justice looking into possible criminal activity, the Securities and Exchange Commission is also active in the investigation.

The company did however state it does not believe that any ultimate liability, if any, will have any sort of material effect on its financial condition, results of operation or cash flows.

In addition, the company faces two class-action lawsuits. The first suit accuses the company of "making materially false and misleading statements in the registration statement and prospectus issued in connection with the IPO." The second suit alleges that the company "received loans, through the company's platform, that exceeded states' usury limits in violation of state usury and consumer protection laws."

Posted-In: Class Action Suit Department of Justice LendingClub Peer To Peer Lending renaud laplancheNews Legal Movers


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