[ad_1]
San Francisco – Renaud Laplanche, a figurehead of Silicon Valley's action to challenge the financial sector, on Friday concluded with federal regulators accusations that he fraudulently inflated his company's revenues.
The Securities and Exchange Commission has accused Mr. Laplanche, founder and former managing director of the start-up LendingClub, of improperly changing some of the company's loan products to make it healthier.
These charges are the result of a tragedy that began in 2016, when LendingClub's board forced Mr. Laplanche to resign.
Mr. Laplanche was a highly respected figure in the technology and finance sectors. But his council said that he had made several inappropriate decisions.
Under the bylaw reached with the S.E.C., Mr. Laplanche neither acknowledged nor denied a wrongdoing. But he agreed to be excluded from the securities industry for three years and pay a fine of $ 200,000.
Mr. Laplanche, who founded a competitor at LendingClub after his resignation, said the sanctions would not force him to change roles at his new start-up, Upgrade, because the two companies have different structures.
"I am pleased to have reached an agreement with the S / C to put an end to any problem related to compliance failures that may have occurred under my supervision at the Loan Club," Laplanche said in a statement.
The charges against Mr. Laplanche are the latest blows that the S.E.C took against senior Silicon Valley leaders, coming a day after the agency continued Tesla co-founder Elon Musk.
The commission has also entered into an agreement with the former CFO of LendingClub. In addition, the company will pay a fine of $ 4 million for the problems that have occurred under Mr. Laplanche's direction.
But the CO said the company quickly solved the problems and "provided extraordinary cooperation with the agency's investigation."
LendingClub Chairman of the Board Hans Morris said the SCE's charges helped validate the board's decision to remove Mr. Laplanche in 2016.
"The decision of the board was not taken lightly, but the violation of the company's business practices as well as the lack of full disclosure by Mr. Laplanche during the review were unacceptable," said Friday Mr. Morris . "We have full confidence in our new management team and we are a better company today."
Mr. Laplanche founded LendingClub in 2006 and made it one of the most prominent start-ups to face banks and other financial giants using new technologies. The company has issued personal loans, mainly to individuals wishing to refinance credit card debt, and sold the loans to investors.
Proponents of the company and the industry it created have said it could replace traditional methods of obtaining loans. The company has attracted personalities like Larry Summers, former Treasury Secretary, and John Mack, former CEO of Morgan Stanley, to its board of directors. When LendingClub went public in 2014, it was one of the most important initial public offerings of this year by a technology company.
Following the departure of Mr. Laplanche in 2016, the Board stated that it had not been transparent in many respects, particularly with respect to loans made by Mr. Laplanche and his family members to LendingClub. .
The charges announced by the SJC do not affect most of the charges the company brought against Mr. Laplanche. In the order issued on Friday, regulators focused on funds that LendingClub had overseen on behalf of investors and which had been used to buy loans from LendingClub.
According to the CO, a division of LendingClub led by Mr. Laplanche had adjusted the way the funds were managed without notifying investors, in order to create demand for some of the loans that LendingClub was distributing.
LendingClub struggled to recover from the scandal surrounding Mr. Laplanche's departure. The company's shares are worth only slightly more than today, after their resignation, although they rose slightly on Friday after the announcement of the settlement.
Mr. Laplanche's new company, on the other hand, has grown rapidly. He recently announced that he has issued more than $ 1 billion in loans and has entered into a series of C Series financing.
Source link
