LendingClub faces first federal lawsuit
Print Edition
LENDINGCLUB Corp has been hit with the first of what could be many federal lawsuits by shareholders who claim the online lender, which forced out its chief executive last week, inflated its share price by concealing its inability to monitor its operations.
In a complaint filed on Monday to the San Francisco federal court, plaintiff Steeve Evellard said LendingClub misled shareholders into believing its internal controls were strong enough to stop questionable lending practices and ensure proper disclosures.
The complaint said shares plunged as the truth became known, including a 51 percent slide last week, wiping out several billion dollars of the San Francisco-based company’s market value. A LendingClub spokeswoman declined to comment yesterday.
The suit covers shareholders from LendingClub’s December 2014 IPO to May 6, 2016, the last trading day before founder and Chief Executive Renaud Laplanche resigned in the wake of an internal probe.
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