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Well, it hasn’t been a pretty week for largest U.S. marketplace lender, LendingClub.

On Monday, news hit that the founder and CEO of the firm, Renaud Laplanche, is out, as are 3 other professionals at the firm. The news sent the already-hammered stock reeling.

LendingClub stock gets smacked

And now, as Lending Club is turning to securitization as Plan B to allay waning demand for loans on its platform (as Prosper and other European competitors are doing), the firm’s investment banks, Jeffries and Goldman Sachs have both iced those deals.

What’s so bad?

But what exactly did Renaud Laplanche do that was SO bad? To be honest, Bloomberg’s Matt Levine doesn’t know.

Part of the question at hand is whether this is a company issue or something more particular to the company’s (now ex-) CEO. There seem to be mixed signals: on one hand, there’s been mislabelling of loans for resale to an individual investor (Jeffries) and a previous request by said investor to fix up disclosures made to borrowers on LendingClub’s marketplace. While important, it’s hard to believe that LC’s CEO would need to fall on his sword for this one.

On the other hand, there appears to be a more nefarious shell game going on: Laplanche hadn’t disclosed an ownership stake in an investment fund that was created to purchase LC loans. Worse, LC just invested in that fund. (John Mack, LC’s chairman and financial industry bigwig also happens to own a bigger stake of said fund, but that doesn’t appear to be at issue here other than the fact thatMack seems to attract bad loans).

The first problem seems like something more easily remediable, the latter less so.

Why is everyone making such a fuss about this?

Well, for a variety of reasons. People love to read about the disruptor getting disrupted but more than that, Laplanche (who, by the way,appeared as an early guest on the Tradestreaming Podcast in 2012) has been the face of the marketplace lending industry. He’s keynoted conferences and acted almost as an unelected spokesperson for marketplace lending. In a way, he’s played an integral part in where the industry is today. Nefarious behavior on his behalf could be seen as having knock-on effects to the industry at large.