Hubris and catharsis are the two words that come to mind.
Mr. Laplanche's hubris was partly in saying out loud that Lending Club's mission was to revolutionize the banking system. Even if marketplace lending is like email to banks' fax machines, you don't go public and proud with something so grandiose.
Hubris is also thinking you are above following the rules just because you are the CEO of a startup in a sexy category.
Catharsis happens when hubris gets its comeuppance. And out of catharsis comes a chance to realign and renew. Not only did Lending Club need a catalyst to move the next phase, the overall category did as well. And the story of the dramatic fall of a once high flying CEO is the first step.
Of course, everything depends on whether borrowers and investors continue to come to the platform. Rationally there is no reason for them not to. These folks have been showing up in the numbers reflected in Q12016 results, not because they wanted to take part in the Revolution. Rather, borrowers come for fast service and low rates, and investors for nice uncorrelated yields. Those things are still available right now on the platform.
Uncertainty may slow things down for a bit, and some customers will go away permanently. However, the real world needs of borrowers and investors will not lessen in the meantime. Investors need yield and they will continue to seek it out.
There is indeed a lot of shade being thrown in the media. Are banks the source? They rely on customer ignorance for their business model. Stands to reason they'd push news pieces that attempt to bamboozle readers.
I assume you are referring to the 2015 10K annual report? That 4.5B liability--notes and certificates, at fair value--is offset by a corresponding asset--loans at fair value. Also to get to the total cash position you need to add in securities available for sale, an additional 297M, for a total of 920M in cash. This will drop for the current quarter as LC is buying back 150M worth of its stock.