Lending Club (LC), one of the largest online loan services, said on Monday that its chairman and chief executive, Renaud Laplanche, resigned after an internal review showed a violation of the company’s business practices. Despite the San Francisco-based company reporting solid figures in its fiscal 2016 first quarter earnings – matched our Zacks Consensus Estimate with an EPS of $0.01, surpassed our consensus revenue estimates with revenue figures of $152.3 million, and increased revenues 87% year-over-year – the company was down over 30% in pre-market trading and is currently down over 27% this afternoon. Lendingclub Corporation (LC) Stock Price | FindTheCompany (Also read: “Key Morning Earnings for May 9: BID, LC, SSYS, TEVA, TSN”) Scott Sanborn, the company’s president, will be acting chief executive, while Hans Morris will become executive chairman. Regarding business practices issue, Lending Club said that the case involved sales of $22 million in near-prime loans to a single investor. The company said it made the sale in a fashion that went against the investor’s instructions. Lending Club ensured that the issue with the investor had nothing to do with credit quality or pricing, yet did not disclose how the deal defied the investor. “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,” Mr. Morris said in a statement. “Accordingly, the board took swift and decisive action, and authorized additional remedial steps to rectify these issues.” Mr. Laplanche founded Lending Club in 2006. The company was the first marketplace consumer lender to go public when it made its debut in 2014, and Mr. Laplanche “frequently gave interviews to extol the virtues of this type of lending,” per a New York Times report. On a conference call with analysts on Monday morning, Lending Club’s new executive team attempted to reassure investors that they corrected the weaknesses and concerns in internal controls as well as the issue with the $22 million loan sale was “isolated.” “This has been a difficult weekend for the Lending Club family,” Mr. Sanborn said on the conference call. Despite Lending Club’s profit in the quarter, the company faced trouble funding its loans in the capital markets, as investors grew wary about potential credit problems. Lending Club has a Zacks Rank #3 (Hold) and its shares are down 27.39% as of 2:10 PM ET on heavy volume – over 65 million shares have been traded. Lendingclub Corporation (LC) vs. Peers Percent Change Over Time - 3 Months | FindTheCompany Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report LENDINGCLUB CP (LC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research