Robbins Geller Achieves Class Certification Victory for LendingClub Investors
On October 20, 2017, the Honorable William Alsup of the United States District Court for the Northern District of California certified a class of investors in the securities class action In re LendingClub Securities Litigation. The court appointed Robbins Geller as class counsel and the Water and Power Employees’ Retirement, Disability and Death Plan of the City of Los Angeles (“WPERP”) as class representative.
LendingClub Corporation, together with its subsidiaries, operates as an online marketplace that connects borrowers and investors in the United States. Filed on May 16, 2016, the case charges LendingClub and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and Securities Act of 1933. More specifically, the case alleges that LendingClub promised investors an opportunity to get in on the ground floor of a revolutionary lending market fueled by the highest standards of honesty and integrity. LendingClub’s founder and former CEO, co-defendant Renaud Laplanche, brought in industry luminaries such as Dr. Larry Summers and former Morgan Stanley CEO John J. Mack to serve as members of the LendingClub Board of Directors, to create an aura of legitimacy. But beneath this veneer, LendingClub lacked even the most basic internal controls, and this allowed its management to manipulate its performance by engaging in self-dealing, altering loan applications and misleading institutional investors.
In granting certification, the court commented that “WPERP has vigorously prosecuted this action to date” and noted that “[w]hile it is true that an almost-identical action already commenced in another forum weighs against superiority, here, WPERP persuasively argues that its claims are nevertheless superior.” The court also held that the action “remains the superior forum with respect to maximizing recoverable damages.”
In re LendingClub Securities Litigation, No. 3:16-cv-02627-WHA, Order re Class Certification (N.D. Cal. Oct. 20, 2017).