Renaud Laplanche

Full Report

Key Points

• The primary issues originated from 2016 events at LendingClub, triggered by an internal review.
• The review uncovered violations of business practices, including irregularities in loan sales.
• Renaud Laplanche had undisclosed personal investments in a fund that LendingClub was considering investing in.
• These revelations led to Laplanche’s resignation as CEO and chairman in May 2016.
• In September 2018, the SEC charged Laplanche, former CFO Carrie Dolan, and LendingClub Asset Management with fraud.
• The charges involved directing private funds to purchase loans that benefited the parent company rather than fund investors, breaching fiduciary duties.
• Additional charges included improperly adjusting fund returns.
• All parties settled the SEC charges without admitting wrongdoing.
• Laplanche paid a $200,000 penalty and accepted a three-year bar from the securities industry (with possibility of re-entry).
• LendingClub Asset Management paid a $4 million penalty.

Overview

Renaud Laplanche is a French-American fintech entrepreneur and founder of two major online lending platforms. He founded LendingClub in 2006, growing it into America’s largest personal loan provider, facilitating tens of billions in loans and taking it public in 2014 with the largest U.S. tech IPO that year. After resigning in 2016, he co-founded Upgrade, Inc. in 2017, where he serves as CEO. Upgrade is a fast-growing fintech unicorn offering personal loans, credit cards, checking/savings accounts, and other credit products aimed at mainstream consumers, having originated over $35 billion in credit with millions of customers.

Allegations and Concerns

Serious red flags center on the 2016 LendingClub internal review, which found Laplanche failed to disclose a personal investment in Cirrix Capital while LendingClub considered (and later made) an investment in the same fund, creating a conflict of interest. Additional issues included sales of $22 million in loans contravening investor instructions and lack of full transparency during the review. The 2018 SEC action alleged Laplanche caused a managed fund to buy at-risk loans to prevent platform revenue loss, prioritizing LendingClub over fund investors, and authorized improper return adjustments to inflate performance. Separately, LendingClub faced a shareholder class-action lawsuit over misleading statements on practices and controls, settled for $125 million in 2018 (Laplanche not directly penalized beyond the SEC matter). No post-2018 allegations or lawsuits against Laplanche personally have been identified.

Customer Feedback

Feedback primarily relates to Upgrade, Inc., as Laplanche’s current company (LendingClub reviews predate his departure). On Trustpilot, Upgrade holds a strong 4-star rating from over 50,000 reviews, with many praising quick approvals, easy applications, and helpful customer service, such as “great customer service” and “the loan app is easy to use and auto payment is convenient.” Positive examples highlight fast funding and supportive staff. Negative reviews on BBB and Trustpilot include complaints about denied credit limit increases despite improved credit scores, perceived punitive actions for paying off balances quickly (reducing interest revenue), inconsistent service, and unfavorable terms. Some customers describe experiences as “predatory” due to unwillingness to accommodate requests, though Upgrade often responds by investigating accounts and noting no discrepancies found.

Risk Considerations

Financial risks are low currently, as Upgrade has raised substantial equity (hundreds of millions) and originated billions in loans profitably. Reputational risks persist from the 2016-2018 LendingClub events, potentially affecting investor or partner trust in highly regulated fintech, though many former backers supported Upgrade quickly after his departure. Legal risks appear resolved post-2018 settlement, with no ongoing cases; the securities bar expired around 2021 and did not impact Upgrade’s non-advisory model.

Business Relations and Associations

Laplanche co-founded Upgrade with former LendingClub executives and attracted investment from prior LendingClub backers like Union Square Ventures. Upgrade partners with over 250 institutional loan buyers and banks for funding and financing. Key early supporters included Jefferies (involved in the 2016 loan issue but became Upgrade’s first buyer). Laplanche maintains ties in fintech through awards, interviews, and industry recognition.

Legal and Financial Concerns

• 2016: Resignation amid internal review findings on conflicts and loan sales.
• 2018: SEC settlement ($200,000 penalty, 3-year industry bar).
• Related: LendingClub shareholder suit settled for $125 million; DOJ investigation closed without charges against the company. No bankruptcy, unpaid debts, or post-2018 lawsuits recorded for Laplanche or Upgrade.

Risk Assessment Table

Laplanche’s career reflects resilience in fintech innovation, founding two prominent platforms despite a significant setback at LendingClub. The 2016 resignation and 2018 settlement highlight governance and compliance lapses under pressure to maintain growth, but the absence of admitted wrongdoing, quick investor support for Upgrade, and its subsequent success suggest the incidents were contained. Upgrade’s consumer-focused model and scale indicate Laplanche remains a capable leader, though reputational echoes from past events warrant caution in trust-sensitive partnerships. Overall, current risks appear manageable, with his track record leaning toward positive contributions to accessible credit.