LendingClub Receives Grand Jury Subpoena From U.S. DOJ

(RTTNews) - LendingClub Corp. (LC) disclosed that on May 9, 2016, it received a grand jury subpoena from the U.S. Department of Justice or DOJ. The Company also contacted the U.S. Securities and Exchange Commssion. The company intends to cooperate with the DOJ and the U.S. SEC. The DOJ and the SEC may have additional requests, and no assurance can be given as to the timing or outcome of these matters.

On May 9, LendingClub said that Renaud Laplanche resigned as chairman and CEO of the company following an internal review of sales of $22 million in near-prime loans to a single investor that failed to conform to the investor's express instructions.

Subsequent to March 31, 2016, the Company announced that the board of directors accepted the resignation of Renaud Laplanche as CEO and Chairman. The Company considers loss of key personnel to be an adverse indicator of potential goodwill impairment. The loss of the services of executive officers or members of senior management team, and the process to replace any of them, would involve significant time and expense and may significantly delay or prevent the achievement of our business objectives. In addition, the Company may be subject to litigation related to the events surrounding the resignation of Mr. Laplanche. These occurrences could result in adverse publicity and adversely affect the Company's brand. As a result, the company could record goodwill impairment expense upon completion of the annual goodwill impairment test in the second quarter of 2016.

LC closed Monday's regular trading at $3.94, up $0.43 or 12.25 percent. However, in the after-hours trade, the stock dropped $0.29 or 7.36 percent.