Chancery Scraps LendingClub Investors' Suit Over FTC Probe

Law360 (March 30, 2021, 8:43 PM EDT) -- Delaware's chancellor dismissed a derivative suit Tuesday that accused online venture LendingClub Corp. of misleading stockholders about a Federal Trade Commission investigation, finding that the suing investors failed to justify bypassing LendingClub's board on the way to court.

Chancellor Andre G. Bouchard said in a 56-page decision that the complaint fell short of alleging specific facts showing that a majority of the lender's directors were incapable of fairly considering or potentially pursuing the claims themselves, including allegations that the company had failed to put a compliance monitoring system in place.

The suit also failed to show that directors consciously tolerated violations...

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