A week after Lending Club’s CEO abruptly left the company, the peer-to-peer lending service disclosed that it had received a federal grand jury subpoena and warned investors it could soon face legal action. 

Lending Club, which matches borrowers who need loans with those who want to provide them, disclosed in a filing with the Securities and Exchange Commission on Monday that it was under investigation by the Department of Justice for a matter related to the allegedly improper loan sales by former CEO Renaud Laplanche and another executive.

According to the filing [PDF], Lending Club received a grand jury subpoena from the DOJ on May 9.

“The company intends to cooperate with the DOJ and the SEC,” the filing states. “The DOJ and the SEC may have additional requests, and no assurance can be given as to the timing or outcome of these matters.”

Lending Club also notes in the filing that the company may be subject to legal proceedings and regulatory actions.

“The company does not believe it is probable that the ultimate liability, if any, arising out of any such matter will have a material effect on its financial condition, results of operations or cash flows,” the filing states.

Lending Club did not specify which records the DOJ sought to obtain with the subpoena.

The filing notes that the SEC’s initial document request came the same day Laplanche left the company following a board review.

According to the filing, the board’s internal review found that the company’s business practices were violated with the sale of $22 million in loans to a single investor.

“Although the portfolio composition of the fund was disclosed monthly to the investors of the fund, it was not disclosed to our board,” the filing states. “We have taken various control remediation steps, including termination or resignation of senior managers involved in these non-compliant loan sales, and intends to take additional control and other remediation steps in the coming months.”

Additionally, the review found that Laplanche and another executive had secured personal loans from a third-party company that was looking to do business with Lending Club.

Also included in the SEC filing, Lending Club said it had identified weaknesses in its financial reporting and outlined measures it would take to resolve investor concerns.

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