Robbins Arroyo LLP: LendingClub Corporation (LC) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against LendingClub Corporation (NYSE: LC) in the U.S. District Court for the Northern District of California. The plaintiff brings the complaint on behalf of all purchasers of LendingClub Corporation (“LendingClub”) securities issued in connection with the company’s initial public offering on or about December 11, 2014 (the “IPO”) and/or on the open market between December 11, 2014 and May 6, 2016, for alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 by LendingClub’s officers and directors. LendingClub, together with its subsidiaries, operates as an online marketplace that connects borrowers and investors in the United States.
LendingClub Accused of Implementing Inadequate Internal Controls
According to the complaint, on December 11, 2014, LendingClub conducted its IPO, selling 58 million shares and raising $870 million. The company’s Registration Statement touted its ability to provide its customers with “affordable credit” and emphasized its products to be fair, transparent, and borrower-friendly. The Registration Statement also stressed LendingClub’s ability to provide attractive returns through equal access to loans offered to all investors through its marketplace. LendingClub also submitted several filings with the U.S. Securities and Exchange Commission (“SEC”) stating that the financial information was accurate and disclosed any material changes to the company’s internal control over financial reporting. The complaint alleges, however, that LendingClub officials failed to disclose that LendingClub’s internal controls were inadequate to ensure both that LendingClub’s loans conformed to its customers’ criteria, and that its internal relevant interests in third-party transactions were fully and timely disclosed.
On May 9, 2016, LendingClub disclosed in an SEC filing that on May 6, 2016, the company’s Chairman and Chief Executive Officer had resigned. The resignation was precipitated by an internal review that found that the company had sold $22 million in loans, made to customers with low credit scores, to a single investor, in violation of the investor’s “express instructions.” The company further 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. On May 10, 2016, Bloomberg and other news outlets reported that Goldman Sachs and Jefferies LLC had halted their purchases of LendingClub loans. LendingClub’s stock currently trades below $3.70 per share, a decline of more than 75% from the IPO price, and a decline of nearly 87% from the stock’s class period high.
LendingClub Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.