Lending Club Cuts Jobs, Names Scott Saborn CEO, and Discovers More Problems of Ex-CEO

Lending Club (NYSE: LC), the world’s largest online peer-to-peer lending marketplace, has decided to cut 179 jobs. The company said it will take a charge of $3 million in the second quarter for the elimination of jobs. The company expects loan origination in the second quarter to be roughly one third lower than in the first quarter of 2016.

On Tuesday, the company announced that the board of directors named Scott Sanborn, its Chief Marketing Officer and Chief Operations Officer, as CEO and President.

“Scott and the management team have demonstrated they can lead Lending Club through this turbulent time,” said Hans Morris, Chairman of the Board of Directors. “The board has decided this is the right time to hand full responsibility over to Scott in his role as the CEO. With today’s announcements and Scott at the helm, Lending Club is now in a position to move forward.”

Lending Club was hit by scandals over the company’s loans and ex-CEO Renaud Laplanche in early 2016, resulting in its stock taking a huge hit and the oust of Renaud Laplanche.

The company said on Tuesday that an internal review had found Laplanche and his family had taken out 32 loans on the platform in December, 2009 to boost the company’s reported volumes for the month. All the loans have been repaid, said by the company.

In early May, the company’s board discovered Mr. Laplanche failed to report errors related to a sale of loans and disclose conflicts of interest.

The company also said the ongoing review revealed that a family of funds controlled by a Lending Club subsidiary that invests in its loans didn’t follow accounting standards when valuing the funds’ assets. It will reimburse its limited partners affected by the adjustments around $800,000.

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