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LendingClub Tumbles After Investors Suspend Debt Purchases

  • Firm got grand jury subpoena from Justice Department last week
  • Company is considering new ways to draw funding for its loans
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LendingClub Shakeup: What Comes Next?

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LendingClub Corp. shares resumed their slide in New York trading Tuesday amid a scandal that cost the chief executive officer his job, prompted investors to suspend debt purchases and spurred a U.S. Justice Department probe.

The stock tumbled 11 percent to $3.52 at 1:23 p.m. following a regulatory filing from the company late Monday that said strategies to restore investor confidence and obtain new capital for loans might include equity or debt sales, fee changes or other moves that could be “costly or dilutive” to shareholders. The shares, which traded as high as $11.25 in January, plunged 51 percent last week after the surprise departure of Chairman and CEO Renaud Laplanche and the disclosure of faulty internal controls.