LendingClub CEO Laplanche Resigns After Review Of Sale Of Near-prime Loans

Lending Club Corp. said Monday that Chief Executive Renaud Laplanche is resigning after a review of sales of $22 million in near-prime loans to a single investor breached that investor's explicit instructions. "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," board director Hans Morris, who has taken on the role of executive chairman, said in a statement. The online lender said it has named President Scott Sanborn as acting CEO, to be supported by Morris. The company said it will take stops to resolve the material weaknesses in its internal controls and improve its disclosure controls. Three senior managers have resigned after the review. The company said it had net income of $4.1 million, or 1 cent a share, in the first quarter, after a loss of $6.4 million, or 2 cents a share, in the year-earlier period. Adjusted per-share earnings came to 5 cents, matching the FactSet consensus. Revenue rose to $151.3 million from $81.0 million, ahead of the FactSet consensus of $148 million. Shares are down 36% in the year so far, while the S&P 500 has gained 0.7%.