Apr 11 2012
Contact: Ryan Hobart, (573) 526-0949

Carnahan Announces Settlement with Internet Company LendingClub

According to the order, LendingClub is an Internet-based social lending platform that sells “Member Payment Dependent Notes” to investors to fund loans. The consent order requires LendingClub to offer to repurchase more than $461,000 worth of notes that were sold to at least 175 Missouri investors. LendingClub agreed to provide this relief because it continued to offer and sell securities to Missouri investors for more than one year after its registration had expired.

“Online investing is on the rise, and Missourians should be cautious before getting involved with an investment they are not familiar with,” Carnahan said. “Companies who are offering investments online have to play by the rules, and investors should do their homework to make sure an investment is legitimate before turning over their savings.”

The order alleges that LendingClub sold at least 9,000 unregistered, nonexempt securities totaling over $461,000 to at least 175 Missouri investors.

LendingClub is required to offer to repurchase the Missouri investors’ securities plus 8% interest per year from the date of the purchase. LendingClub is required to make this rescission offer to each Missouri investor who invested after October 10, 2010. LendingClub must also pay $100,000 to the Missouri Investor Education and Protection Fund and $5,000 for the costs of the Securities Division’s investigation.

For more information regarding investments and fraud protection, or for information regarding a company or representative, visit the secretary of state’s online Investor Protection Center at or call the toll-free Investor Protection Hotline at 800-721-7996.

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