Shareholders Punish Lending Club For Scandal

Lending Club share price over 4th-9th May

From seven dollars on Friday  to not much more than four.

Lending Club shareholders have responded to yesterday's resignation and admissions of wrongdoing by dumping the stock in large quantities.  The shares fell alarmingly quickly on Monday's announcement, and recovered some of their value by the end of the day, only to take another steep fall as soon as trading opened on Tuesday,

What Happened At Lending Club?

Lending Club logo with big question mark

Questions will inevitably be asked of the whole sector.

Renaud Laplanche,  CEO of Lending Club, the flagship US peer-to-peer lender, resigned suddenly this morning, amid reports that staff had falsified the company records to sell a parcel of loans to an institutional investor. Only one investor was affected, and Funding Club subsequently corrected the transaction by buying the loans back at par.

Theree other executives have also resigned. It isn't clear at time of writing whether Laplanche was personally involved, or he resigned because the wrongdoing took place 'on his watch.' 

EU Shows Support for Crowdfunding

Brussels bar at night

The European Commission has declared its support for equity crowdfunding as an alternative source of finance for Europe's start-ups. The EC has worked out what the UK has known for a while, that an innovation which connects savings to growth and improves the flow of funding to businesses merits the wholehearted support of government.

We'll drink to that

How Risky Is Peer-to-Peer Lending?

A fork-lift truck moves goods in a warehouse

Peer-to-peer lending attracts people looking for higher returns, but many people are put off by the risks involved. But one size doesn't have to fit all.

Asset-backed loans are less risky for the lender. If the borrower has difficulty making the repayments, the lenders have the legal right to take some of the borrower's assets, and sell them to make up the payments.

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