SAN FRANCISCO–Lending Club has received a subpoena from the Justice Department.
The subpoena comes just a week after its former CEO was forced to resign, and was revealed as part of a regulatory filing. The company said it plans to cooperate in the investigation.
Lending Club, one of several so-called marketplace lenders that have emerged as competitors to credit unions, had already announced that its founder and CEO, Renaud Laplanche, had resigned following an internal investigation that allegedly found fabrications related to about $3 million of loan applications. That investigation in turn led to other problems being discovered, including the sale of $22 million of loans to the investment bank Jefferies that Lending Club employees knew were not in alignment with some of Jeffries’ specifications.
The New York Times reported that the latest developments come as “Lending Club is now fighting to defend the soundness of its business model. Even before the internal problems became public, Lending Club and other marketplace lenders had been having trouble selling their loans because of growing doubts about the long-term viability of their business.”
Lending Club’s stock went public in December of 2014 at $24.43 a share; it closed earlier this week just under $4 a share.