What was one of crowdfunding’s early success stories could be turning into an ominous warning for the whole industry.
Lending Club made a big entrance onto the peer-to-peer lending market in 2014 when its IPO raised over $1B, and its stock eventually reached highs of almost $26 a share. But recent investigations by the US Department of Justice and the NY Department of Financial Services have sent its stock plummeting to less than $4.50 a share, National Real Estate Investor reports.
Those investigations are focusing on founder and former-CEO Renaud Laplanche, who left the firm after a probe found the company falsified documentation when selling a package of loans. Investigators are still uncovering what exactly happened at Lending Club, and whether it was an isolated problem or a systemic problem in the crowdfunding industry.
While the jury is still out on that question, one thing is certain—the havoc at Lending Club is weakening investor interest in crowdfunding. [NREI]
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