LendingClub shares climb after naming Sanborn permanent CEO

Scott Sanborn, LendingClub CEO
Getty Images
Scott Sanborn, LendingClub CEO

Shares of LendingClub popped surged 7 percent Tuesday after the firm named Scott Sanborn its permanent chief executive officer.

"Scott and the management team have demonstrated they can lead Lending Club through this turbulent time," Hans Morris, LendingClub's chairman, said in a statement.

"We have demonstrated the power of the Lending Club marketplace model to generate attractive, risk adjusted returns to investors," Sanborn said. "We are working closely with investors to rebuild confidence and are encouraged to see them returning to the platform."

Sanborn was previously the interim CEO.

LendingClub also said it would cut 179 jobs and that it expected to see revenue and earnings growth resume in the first half of next year.

The online lending firm has been under scrutiny since former CEO Renaud Laplanche resigned May 9, following an investigation that showed staff knowingly sold $22 million in loans in March and April 2016 that did not meet the buyer's requirements.

The stock is down 58 percent this year.

LC in 2016Source: FactSet