[ilamont]

The latest disclosures Tuesday, uncovered by a company probe, found that in the last few weeks of December 2009, Laplanche and three relatives took out 32 loans for a total of $722,800. All but three of those loans were repaid in full over the next two months, implying they were taken out to artificially goose Lending Club’s loan origination numbers.

If true, would that be considered fraud?

[jacquesm]

Nah, that's 'growth hacking' /s.

Really, yes obviously that's fraud but apparently it's perfectly normal as long as you don't get caught.

Artificially inflating the numbers whilst shopping for investments is definitely not acceptable. Pumping money around is an old trick to inflate the visible size of a company, some of these schemes are surprisingly hard to detect (the one here definitely isn't).

I'm somewhat surprised that there was no oversight in place that would have stopped this, that's serious money.

[ellius]

Yep. Self-dealing is always an enormous red flag for fraud and other shadiness, in financial businesses especially.

[hkmurakami]

I feel like almost every startup that "made it" used dark-hat growth hacking tactics to pad their numbers. But the other companies were typically in the consumer internet space. I would expect some additional rules to exist for a highly regulated market like Finance.

[gogopuppygogo]

There is some truth to Gilfoyle in the season finale of Silicon Valley when he says: "I think I finally respect you as a CEO."

[pmorici]

Whether it is or not it doesn't have any relevance to the current state of the company.

[mikeyouse]

They either lacked the internal controls or the morals to stop likely illegal self-dealing.. I wouldn't be first in line to trust their next moves..