Categories Finance

LendingClub shares sink after FTC files complaint

Just a few months after LendingClub agreed to settle a lawsuit relating to CEO Renaud Laplanche ‘s departure disclosure to shareholders, the world’s largest peer-to-peer lending firm yesterday received another major blow from the Federal Trade Commission (FTC).

FTC has sued the company for violating the FTC Act and the Gramm-Leach-Bliley Act. The regulator has moved the court in San Francisco in the public interest.

LendingClub (LC) has been sued by FTC for misleading the customers on disclosure of fees, sending loan approval message to borrowers without getting backed by the investors and withdrawing money from bank accounts without customer consent. The company has refuted the charges made by the regulator stating, “FTC’s complaints are legally and factually unwarranted.”

The latest charges from the regulator haven’t been taken lightly by investors. LendingClub’s shares plunged 15% on Wednesday pushing it to an all-time low of $2.77. It’s important to note, the online platform’s stock has nosedived 32% this year and has plummeted more than 80% since IPO.

Lending Club Stock Price Trend

Earlier in 2016, the company had landed in a barrage of governance-related issues resulting in the unceremonious exit of its Founder and CEO Renaud Laplanche. A few of the senior management members also were shown the door due to loan manipulation and improper sale of loans. LendingClub had agreed to settle the lawsuit for $125 million.

Founded in 2007, LendingClub has been one of the pioneers in the fintech industry. It listed on the bourses in 2014 with a whopping $10 billion valuation raising nearly $1 billion. Since inception, more than 2 million members have borrowed $33.6 billion through its platform. Though the stats have been amazing, the company has not been able to get into the good books of the regulators so far.

LendingClub is reporting its first quarter results on May 8 after the closing bell.

Most Popular

Aurora Cannabis (ACB) Earnings: 3Q21 Key Numbers

Aurora Cannabis Inc. (NYSE: ACB) reported third quarter 2021 earnings results today. Total revenues fell 25% year-over-year to CAD55.1 million. Adjusted EBITDA loss amounted to CAD24 million. Cash balance as

Walt Disney (DIS) Q2 revenue down 13%; earnings beat estimates

Media behemoth The Walt Disney Company (NYSE: DIS) reported second-quarter revenues that declined from last year as customers stayed away from theatres and parks due to pandemic-related safety issues and

Three key factors that bode well for Tattooed Chef (TTCF) going forward

Shares of Tattooed Chef Inc. (NASDAQ: TTCF) have gained 57% over the past 12 months but has dropped 25% since the start of this year. The sentiment on the stock

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top