Chatter: LendingUSA is Letting Go Staff

Online lender LendingUSA is showing some of their employees the door.

Crowdfund Insider recently received a tip from someone with knowledge of the firings.

LendingUSA is a Fintech lender that provides loans to small businesses ranging from $1000 to $35,000. Founded in 2015, LendingUSA specializes in direct-to-consumer financing solutions for the elective medical industry, dental care, consumer goods and more.

LendingUSA has received capital from a variety of sources but it appears the recent firings are related to their relationship with Direct Lending Investments (DLI).

The partnership between LendingUSA and DLI goes back to the beginning when the founder of LendingUSA was introduced to Brendan Ross, former CEO and founder of DLI. The pair met up at LendIt and, according to a report, the relationship progressed to the point where DLI provided $55 million in debt capital.

Ross was jettisoned from DLI by the company’s board of directors when the Securities and Exchange  Commission came knocking on their door accusing the firm of  “a multi-year fraud.”

According to the SEC, the ongoing fraud resulted in approximately $11 million in “over-charges of management and performance fees to its private funds, as well as the inflation of the private funds’ returns.” The SEC alleged that loan payments had been falsified when in fact they had not been made.

Ross owned 100% of the company’s equity.

The Insider told CI:

“The fallout from the Direct Lending Investments fraud case continues to be felt across the online lending industry. Everyone was shocked when the news came out. Now the reverberations are being felt economically by platforms which were closely tied to DLI.”

“Platforms [involved] with the [DLI] investment fund have been laying off staff and key members of their management team. As recently as May, 2019, LendingUSA’s Chief Operating Officer departed the firm along with a significant percentage of their staff.”

The Insider said they will continue to monitor the situation with other personal and small business lending platforms across the country.


Register Now to Watch Online
Sponsored Links by DQ Promote

 

 

Send this to a friend