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Investors were looking to today’s Lending Club Corp. earnings as a sign of validation for the troubled marketplace lending sector.

Instead, they got scandal.

The company said Renaud Laplanche has resigned as chief executive and chairman after an internal review found sales of $22 million in near-prime loans to a single investor — apparently, Jefferies & Co., the Wall Street investment bank — against that investor’s explicit instructions.

Shares of the consumer lender, battered 56% over the past 12 months, have lost 26% in premarket trading to $5.28 a share.

LC President Scott Sanborn will add the acting CEO title, and director Hans Morris has taken the newly created role of executive chairman.

Nevertheless, today Lending Club reported growth in originations, operating revenue, and adjusted EBITDA, “notwithstanding a difficult operating environment,” the company said. Operating revenue in the first quarter of 2016 was $151.3 million, an increase of 87% year-over-year. Adjusted EBITDA was $25.2 million in the first quarter of 2016, an increase of 137% year-over-year.

In announcing Laplanche’s departure, Morris said in the company’s 8-K:

A key principle of the Company is maintaining the highest levels of trust with borrowers, investors, regulators, stockholders and employees. While the financial impact of this $22 million in loan sales was minor, a violation of the Company’s business practices along with a lack of full disclosure during the review was unacceptable to the board. Accordingly, the board took swift and decisive action, and authorized additional remedial steps to rectify these issues.

While the offense seems minor, CNBC is reporting that when confronted with the problem, Laplanche was “not as forthcoming” as he should have been with LC’s board.

This despite the fact that the company earned its first profit last quarter, generating net income of $4.1 million on $2.75 billion of originations, a 68% year-over-year increase. The company has asked the Securities and Exchange Commission for an extension to file its full 10-Q for last quarter.

Here’s the full account from the company on what happened:

Lending Club conducted a review, under the supervision of a sub-committee of the board of directors and with the assistance of independent outside counsel and other advisors, regarding non-conforming sales to a single, accredited institutional investor of $22 million of near-prime loans ($15 million in March and $7 million in April). The loans in question failed to conform to the investor’s express instructions as to a non-credit and non-pricing element. Certain personnel apparently were aware that the sale did not meet the investor’s criteria. In early April 2016, Lending Club repurchased these loans at par and subsequently resold them at par to another investor. As a result of the repurchase, as of March 31, 2016, these loans were recorded as secured borrowings on the Company’s balance sheet and were also recorded at fair value. The financial impact of this reporting is that the Company was unable to recognize approximately $150,000 in revenue as of March 31, 2016, related to gains on sales of these loans. The review began with discovery of a change in the application dates for $3.0 million of the loans described above, which was promptly remediated. The board also hired an outside expert firm to review all other loans facilitated in the first quarter of 2016 and the firm did not find changes to data in these or other Q1 loans. The review further discovered another matter unrelated to the sale of the loans, involving a failure to inform the board’s Risk Committee of personal interests held in a third party fund while the Company was contemplating an investment in the same fund. This lack of disclosure had no impact on financial results for the first quarter. Lending Club will file an extension request with the Securities and Exchange Commission to file its quarterly report on Form 10-Q for the first quarter on or prior to May 16, 2016. Given the events above, the Company took, and will continue to take, remediation steps to resolve the material weaknesses in internal control over financial reporting identified in the first quarter of 2016 — one related to the sales of non-conforming loans and the other to the failure to disclose the personal investment interests — and to restore the effectiveness of its disclosure controls and procedures. These remediation steps included the termination or resignation of three senior managers involved in the sales of the $22 million of near-prime loans.