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Wall Street loved Laplanche for wanting to rethink the way we do banking, but peer-to-peer lending was destined to have a grim, or at least for his company LendingClub Corp. as investors reported to be mistreated.

Laplanche stepped down as CEO, and the impact was felt throughout all of the online lending scenario, destroying a lot of the hopes the enthusiasts had for that specific financing model.

As for the stock markets, LendingClub Corp. saw its prices lower a staggering 35% this Monday, just after the company announced some abuses on the sale of some loans and some internal control problems. The Exchange Commission and the U. S. Securities are already on top of the investigation.

Some highly reputed financial leaders have also lined behind the peer-to-peer financing idea, and are now facing some degree of embarrassment as Laplanche’s idea of bypassing banks turns from hot to not.

The big problem here, according to a senior analyst specializing in peer-to-peer lending – Cormac Leech – is the fact that investors gauge the risk of a certain industry by analyzing its leaders, and in an industry that is only starting and has Laplanche’s company as one of the only faces, the ill practices resound throughout the industry. Investors will assume that if the biggest company does that, so will third-tier and even second-tier ones.

Together with his Chief Executive Officer position, Laplanche had to give away 7.83 million dollars in unvested stock options, and he didn’t respond on our seek for comment.

Laplanche had one of the quickest falls in history, as last month is position was sound and stable, even granting an audience to thousands at the LendIt conference, San Francisco.

 

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He was born in California, US. He graduated from California University with a degree in Computer Sciences, and now works for Reuters and running this Weekly Newspaper. Alongside his day jobs in Reuters, McDonald is also broadcasting a Weekly Gazette.