Online borrowing platform LendingClub (LC) crashed to record lows Monday after its chairman and CEO resigned in connection with an internal investigation into certain loan sales. Weighing in on the news, research firm FBR Capital welcomed the company’s rapid response to the inappropriate sales, but trimmed its price target on the shares to reflect heightened skepticism and uncertainty.

CEO RESIGNS AFTER LOAN REVIEW: LendingClub disclosed this morning an internal review of so-called “non-conforming” loan sales. The company discovered $22M of such sales were made to a single institutional investor whose express instructions appeared largely ignored. “Certain personnel apparently were aware that the sale did not meet the investor’s criteria,” the company noted. Chairman and CEO Renaud Laplanche resigned in the wake of the loan review, as the company disclosed an additional matter involving a “failure to inform the board’s risk committee of personal interests held in a third party fund while the company was contemplating an investment in the same fund.”

QUARTERLY RESULTS: LendingClub also released its first quarter results this morning, showing earnings per share of 5c, matching analysts’ consensus estimate, and revenue of $151.27M versus expectations for $148.23M. The online lender stated that, in light of today’s events, it is currently “prudent” to refrain from providing a financial outlook.

JEFFERIES NAMED AS LOAN BUYER: According to the Wall Street Journal’s sources, Leucadia’s (LUK) Jefferies Group was the unnamed investor who was sold the non-conforming loans. LendingClub is not aware of any regulatory probe into the issue, the Journal added.

WILLIAM BLAIR SUSPENDS COVERAGE: William Blair analyst Ralph Schackart suspended coverage of LendingClub “given the lack of information necessary to make an investment decision” in the wake of the company’s announcements.

FBR APPLAUDS BOARD ACTION: FBR Capital cheered LendingClub’s board for its decisive action in response to the review, which also included an in-depth look into all loans made in the quarter. The board clearly sent a message of zero tolerance, said the research firm, leading it to maintain its Outperform rating on the shares while cutting its price target to $7 from $10 to reflect heightened uncertainty surrounding the event.