LC 8-K 5/16/2016

Section 1: 8-K (8-K)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 16, 2016

LendingClub Corporation
(Exact name of registrant as specified in its charter)

Commission File Number: 001-36771

Delaware

51-0605731

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

71 Stevenson St., Suite 300, San Francisco, CA 94105

(Address of principal executive offices and zip code)

(415) 632-5600
(Registrants telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01

Other Events.

On May 16, 2016, LendingClub Corporation (the Company) released a letter to investors and accompanying exhibits, copies of which are furnished as exhibits hereto.
Safe Harbor Statement
Some of the statements in the attached exhibits are forward-looking statements. The words anticipate, believe, estimate, expect, intend, may, outlook,
plan, predict, project, will, would and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these
identifying words. The Company may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue
reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. The
Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by
law.
Please see our Risk Factors in our Form 10-K for the period ended December 31, 2015 and in our Form 10-Q for the period ended March 31, 2016, as filed with the SEC on
February 22, 2016 and May 16, 2016, respectively.
Item 9.01
(d)

Financial Statements and Exhibits

Exhibits

Exhibit
Number

Exhibit Title or Description

99.1

Letter to Investors dated May 16, 2016

99.2

Data Testing Presentation

99.3

Data Management Remediation Plan

SIGNATURE(S)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
LendingClub Corporation
Date: May 17, 2016

By: /s/ Carrie Dolan

Carrie Dolan
Chief Financial Officer
(duly authorized officer)

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Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1
May 16, 2016

Dear Investor:
Data integrity is an essential component of inspiring trust and confidence in the Lending Club marketplace. The recent review by a sub-committee of the Board of Directors surfaced
a gap in preventative controls related to data management alongside other internal controls issues. In this letter, we want to share the comprehensive, specific actions weve taken
to strengthen our data management framework.
In March, Lending Club detected changes in the application dates of 361 loans sold to a single investor and addressed the issue within 48 hours. In order to test whether other data
had been compromised, an outside expert firm was retained to do forensic data change analysis. The effort was conducted by a Big Four accounting firm, and covered approximately
673,000 whole loans sold to investors over the last 8 quarters in the super prime, prime, near prime and small business programs (see Data Testing Presentation for detail). In total,
the analysis looked at over 10 million test conditions across the loans and fields considered.
Excluding the previously identified 361 loans, 99.99%1 of the remaining loans display either no changes or changes explained by the normal course of business. The normal
course of business includes activities like transfers of loan ownership between investors (e.g., secondary market sales or purchases), quality assurance processes, and certain user
interactions (e.g., inadvertent double-clicks), among others.
Recent efforts supplement the work that Lending Club has done over time to audit and manage its data. A key component of our ongoing work is our 2015 SOC 1 Type 2 report,
which includes the testing of over 55 control activities and contains a clean audit opinion.
Lending Club is also making the following enhancements:

Enhancing the testing of data changes prior to deployment based on the risk of the change

Reviewing change requests for key data attributes, prior to implementation, by the Internal Audit Team

Validating that change requests for key data attributes have been properly executed

Expanding the number of data fields that are logged for changes

Monitoring logs for key changes

Refreshing training/communication on data change management processes

Enhancing the end-to-end testing framework

Completing a consulting engagement on data change management with a Big Four accounting firm; implementing appropriate best practices

Retraining employees on code of conduct and ethics and the whistleblower hotline

Reinforcing a high compliance culture as explicit objectives in the employee performance review process

The analysis is nearly complete. Approximately 0.01% of the loans are under review as of 5/16/16.

In the interest of transparency, weve provided important additional information in the attached packet:
1.

Data Testing Presentation

2.

Remediation Plan for Data Management

Looking Ahead
Our business thrives on data. We use it in every aspect of our operations, from making credit decisions to hiring employees. Data integrity has been and will always be critical to
Lending Club.
But just as important, our business depends on trust. The problems identified this quarter run counter to our values and will never be tolerated. Were working hard to make things
right and prove to you that we continue to deserve your trust.
We look forward to continuing to work together and having you as an investor for years to come.
Sincerely,

Scott Sanborn
Lending Club President & Acting CEO

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Section 3: EX-99.2 (EX-99.2)

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Section 4: EX-99.3 (EX-99.3)

Exhibit 99.3

Lending Clubs Data Management Remediation Plan

In the immediate term, Lending Club is making the following enhancements:
Area of Focus
Ability to change data fields inappropriately

Planned Activities
Enhancing the testing of data changes prior to deployment based on the risk of the change
Reviewing change requests for key data attributes, prior to implementation, by the Internal Audit Team
Validating that change requests for key data attributes have been properly executed
Expanding the number of data fields that are logged for changes
Monitoring logs for key changes
Refreshing training/communication on data change management processes
Enhancing the end-to-end testing framework
Completing a consulting engagement on data change management with a Big Four accounting firm;
implementing appropriate best practices

Code of conduct and ethics of personnel involved in

change process

Retraining employees on code of conduct and ethics and the whistleblower hotline
Reinforcing a high compliance culture as explicit objectives in the employee performance review process

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