How this lead to Leplache's resignation, I don't quite understand.
According to CNBC (which was according to unnamed sources) when the board started looking into the data manipulation, Laplache attempted to obfuscate and was "less than forthcoming."
As rawraw said, "data manipulation is no good." LC sells notes to investors based on trust. Trust that they are giving us what they say they are giving us. If they back dated a few loans to fulfill an order from an investment bank, what might they have done to us?
In another thread, someone called a potential run on the bank. That's an apt metaphor. If investors do not continue to add funds (let alone reinvest payments) then LC faces a funding crisis. LC is barely profitable and they need capital to grow to a place where they can be profitable. No investors = no growth. No growth -> no capital. No capital = no Lending Club.
I mean, how does this impact your typical LC (P2P) investor?
As discussed a bunch, the status of notes in a bankruptcy situation is uncertain. No Lending Club = Bankruptcy which means we MIGHT or MIGHT NOT get paid on the notes we bought.
The board understand all of this. Investors are the heart of LC and without them, the business is gone. The best thing I see from this situation is that the board is strong and independent. They grabbed the bull by the horns, and fired a wildly popular CEO. The band-aid got ripped off and they hope to move on. If they let this fester, they ran the risk of the WSJ/whoever scooping this which would have been worse. In doing what they did, they are signaling to investors that the board has their back.