Renaud Laplanche was forced to fly the Fin Tech nest after LendingClub's board found that his company had sold an investor US$22 million in loans that didn't conform with the investors instructions. Then, someone at the company changed the dates on US$3 million worth of loans to make them comply — and didn't disclose this information to the board.
Does NYDFS asking #LendingClub about its rates and fees (as opposed to internal controls) indicate a usury investigation? #fintech
— Brian Knight (@BrianRKnight) May 18, 2016
Laughing All The Way to the Bank
LendingClub is now being investigated by the US Department of Justice and New York's Department of Finance. It's stock value has dropped by 50 percent.
The online peer-to-peer company was launched a decade ago, threatening to disrupt the traditional banking market, but now its at the center of fraud investigation which threatens to disrupt the Fin Tech world of online only money lending.
Is The #Fintech Industry The Next Tech Bubble? https://t.co/bOt84zb7MQ pic.twitter.com/zL9s27Xmui
— Ben Franklin (@benfran1992) May 20, 2016
Peer-to-peer banking is attractive because it offers high returns to savers, easier access to loans based on new technology and few regulations.
However, following a shake-up of the Silicon Valley start-up, the traditional finance sector might be laughing all the way to the bank again.
