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Lending Club shares tank after abrupt CEO exit

/ CBS/AP

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NEW YORK - Lending Club (LC) founder and CEO Renaud Laplanche abruptly has resigned after an internal probe revealed improper business practices.

The San Francisco company says $22 million in loans sold in March and April to an investor did not meet that investor's criteria. The company repurchased those loans and sold them to another investor.

Lending Club says a senior manager at the company changed the application dates on $3 million worth of loans.

Shares of Lending Club were down nearly 27 percent, falling to $5.20.

"A key principle of the company is maintaining the highest levels of trust with borrowers, investors, regulators, stockholders and employees," said Hans Morris, executive chairman of the board at Lending Club. "While the financial impact of this $22 million in loan sales was minor, a violation of the company's business practices along with a lack of full disclosure during the review was unacceptable to the board."

Lending Club president Scott Sanborn will become acting CEO.

Lending Club, which raised 870 million in going public in 2014, makes personal and small business loans by connecting borrowers with investors.

First published on May 9, 2016 / 11:57 AM EDT

© 2016 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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