New York Times
Investors were getting the short shrift from online marketplace lender LendingClub before its chief executive quit amid allegations of improper loans, news that sent its stock into a tailspin. That's because LendingClub was stingy in its disclosure of crucial financial data, making it difficult for investors to assess the company's financial health, Gretchen Morgenson writes for the Times.
One such example: LendingClub had previously said that its loans were financed by a "wide range of investors," including wealthy individuals, banks and finance companies, hedge funds, foundations, pension plans and university endowments. But in its annual report, filed in February, LendingClub said "a relatively small number of investors account for a large dollar amount of investment loans funded through our marketplace."
So which is it? LendingClub's tightly controlled flow of information had already been the subject of a whistleblower complaint, filed last year with the Securities and Exchange Commission. LendingClub has omitted such seemingly essential details as data on its credit decisions and scoring models, its investors' returns, loan performance, and investor satisfaction with its platform.
Morgenson suggests that investors sit on the sidelines until LendingClub decides to be more forthcoming with data to let outsiders make an informed decision before investing.
New York's state banking regulator on Friday subpoenaed four investment firms that have been involved in seller-financed mortgages for lower-income groups. The New York State Department of Financial Services is seeking information from Battery Point Financial, New York Mortgage Trust, Apollo Residential Mortgage and an affiliate of Apollo Global Management.
Remember this guy? Once a thorn in the side of banks seeking merger approvals, he's now providing his gadfly services to the United Nations.
Wall Street Journal
Large banks with investment banking operations could see an uptick in revenue during the second quarter, if some companies move ahead with delayed IPOs. The IPO market was put on ice earlier this year because of deleterious market conditions. Some expect that to change in June. Banks that stand to benefit include JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, all of which have roles in U.S. Foods' planned IPO, which would be one of the largest.
The mission of litigation finance appears to have changed. Instead of investors betting on lawsuits that could reap a potential jackpot, investors now see litigation finance as a way for law firms and corporations to move risk off their balance sheets. They do this by investing in a large portfolio of cases. The Journal story names some of the investment funds involved in litigation finance, and it also states that university endowments and pension funds have also put money into litigation finance. No banks are identified in the article.
One of the best capitalized cybercurrency startups is "running itself via computer code on a network," the Journal reports. Called DAO, Decentralized Autonomous Organization, it uses code to run the company without executives or a board of directors. Even its crowdfunding efforts are high-tech…using "the Ethereum platform, an alternative version of bitcoin."
Elsewhere ...
Bloomberg: Tien Phong Commercial Joint Stock Bank in Vietnam identified itself as the bank victimized in last week's cyber attack on the Swift interbank messaging network. Hackers tried to steal more than $1.1 million from the bank through its Swift connection, using a fraudulent transfer request submitted through a third-party service. Tien Phong suffered no losses from the breach, the bank said in a statement. The bank is no longer using the third party.
Dallas Morning News: The public transportation system in Dallas has contracted with a tech start-up to provide a means for the underbanked to ride its trains and buses. PayNearMe is installing its technology at its ticket kiosks and other locations operated by Dallas Area Rapid Transit, also known as DART. PayNearMe allows cash users to pay with smartphones or with reloadable electronic fare cards, instead of exact change and paper tickets. Cash users who can't make an upfront $80 payment for a monthly pass will also now be able to receive the same discounts as those who can buy the monthly pass. DART granted a $3.9 million, 5-year contract to PayNearMe. Merchants that already use PayNearMe include 7-Eleven, Family Dollar and Greyhound Bus.
Wilmington News Journal: College Ave Student Loans in Wilmington, Del., has introduced a loan-refinance product. The program has a range of repayment plans and refinance amounts of as low as $5,000.
