Financial technology executives' disclosure of potential conflicts of interest may come back to bite the entire online lending business, industry sources say.
Start-ups have piled up heady valuations and generated billions in loans, but now investors, industry experts and even regulators, have called for greater transparency.
LendingClub's former CEO, Renaud Laplanche, turned into an overnight poster child for reported conflict of interest issues in the online lending business. What is less clear, is whether other industry executives have ties to hedge funds that buy loans originated by the lenders. Now, some see the need for fintech executives to simplify their relationship networks.
"There are definitely eye-catching conflicts of interests on boards with far too much regularity," said Class V Group partner Lise Buyer, who consults with pre-initial public offering start-ups. "I do think that sitting on multiple boards in the same industry does raise issues. People too often look the other way, but it's not always black and white."