WASHINGTON, D.C. — U.S. Market Advisors Law Group PLLC announces that a class action lawsuit has been filed against LendingClub Corporation (“LendingClub” or the “Company”) (NYSE:LC) and certain of its officers. The class action, filed in United States District Court, Northern District of California, and docketed under 16-cv-02627, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired LendingClub securities: (1) pursuant and/or traceable to LendingClub’s false and misleading Registration Statement and Prospectus issued in connection with the Company’s initial public offering on or about December 11, 2014 (the “IPO” or the “Offering”); and/or (2) on the open market between December 11, 2014 and May 6, 2016, both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by Defendants’ violations of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) (the “Class”).
LendingClub, together with its subsidiaries, operates as an online marketplace that connects borrowers and investors in the United States.
The Allegations Against LendingClub
The Complaint alleges that in connection with the IPO and throughout the Class Period, Defendants made materially false and misleading statements regarding the LendingClub’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) LendingClub’s internal controls were inadequate to ensure that LendingClub’s loans conformed to its customers’ criteria; (ii) LendingClub’s internal controls were inadequate to ensure that relevant interests in third-party transactions were fully and timely disclosed; and (iii) as a result of the foregoing, LendingClub’s public statements were materially false and misleading at all relevant times.
On May 9, 2016, LendingClub disclosed in an SEC filing that on May 6, 2016, the Company’s Board of Directors had accepted the resignation of Defendant Renaud Laplanche (“Laplanche”) as the Company’s Chairman and Chief Executive Officer (“CEO”). The Company reported that Laplanche’s resignation was precipitated by an internal review that found that the Company had sold $22 million in loans, made to consumers with low credit scores, to a single investor (later reported to be Jefferies LLC (“Jefferies”)), in violation of the investor’s “express instructions.”
In the same filing, the Company also disclosed “a failure to inform the board’s Risk Committee of personal interests held in a third party fund while the Company was contemplating an investment in the same fund.” Media outlets subsequently reported that Laplanche had failed to fully disclose a personal interest he held in Cirrix Capital while the Company was contemplating investing in the fund—an investment that Laplanche had himself proposed to LendingClub’s risk-management committee—and that LendingClub Board Member John Mack also held an undisclosed interest in Cirrix Capital.
On this news, LendingClub’s stock fell $2.48 per share, or nearly 35%, to close at $4.62 per share on May 9, 2016.
On May 9, 2016, post-market, news outlets reported that the SEC was investigating LendingClub’s disclosures.
On May 10, 2016, Bloomberg and other news outlets reported that Goldman Sachs and Jefferies had halted their purchases of LendingClub loans. That same day, the U.S. Treasury Department issued a White Paper describing the online lending industry as “untested” and calling for more regulation.
On this news, LendingClub stock fell $0.52 per share, or 11.3%, to close at $4.10 per share on May 10, 2016.
LendingClub Shareholders Have Legal Options
If you suffered a loss in Express Scripts you have until July 15, 2016 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as a lead plaintiff. Concerned shareholders who would like more information about their rights and potential remedies can contact attorney David P. Abel (202) 559-8591, firstname.lastname@example.org.
U.S. Market Advisors Law Group PLLC is a law firm based in Washington, D.C. The firm represents institutional investors from across the world in U.S. securities class action lawsuits.
Attorney Advertising. Past results do not guarantee a similar outcome.