It may be time to install a revolving door in the Human Resources office at Prosper Marketplace (prosper.com) as the pace of departures by high-profile executives appears to be picking up speed.

In addition to the numerous departures of a decidely mixed bag of human talent during Prosper’s short life, there are reports tonight that General Counsel (and Chief Compliance Officer) Ed Giedgowd is no longer with the company, but has been replaced by a gentleman named Sachin Adarkar.

In related news, it has now been confirmed that Product Manager Andrew Martinez-Fonts has also moved on to another venture. 

Other notable departures over the years include:

John Witchel, Co-Founder and Chief Technology Officer

Thomas Pigoski, VP Information Security & Risk Management/CISO

Karen Appleton, VP Business Development

Rob Klapper, Chief Marketing Officer

Shira Levine, Marketing Director

Update: Fellow Giedgowd-watchers may find this (How about it, Mr. Giedgowd?) of some interest.

Update: Chief Marketing Officer Catherine Muriel departs

Over the years, lenders on Prosper.com have regularly been stunned by what has been widely perceived a long and consistent string of poor legal choices – and the topic of Prosper’s legal competence is frequently a target of ridicule at Prospers.org.

We don’t often hear from Ed Giedgowd, Prosper’s General Counsel.  In fact, he does not even respond to letters from attorneys retained by Prosper’s customers, including when advised that the consequences for not responding would include litigation.

So, is Mr. Giedgowd as incompetent and inexperienced as some lenders claim he must be, based on his track-record?  Is this his first job out of Law School at the University of Phoenix - or was he all Prosper could afford to hire?  Did he come by his JD degree by way of identity theft?

I don’t know the answers to any of the harsh allegations listed above, but this whole question of whether or not Prosper knew (or should reasonably have known) that what they were doing was illegal, made me poke around a bit.

Here is what I found (note: emphasis is mine).

About Ed Giedgowd

Chief Compliance Officer and General Counsel

Mr. Giedgowd brings over 22 years of experience in dealing with consumer credit issues to his role at Prosper Marketplace, Inc. Most recently, he served as General Counsel at E-LOAN from October 1999 until June of 2005. Prior to that, Mr. Giedgowd was the head of the consumer finance practice group at the San Francisco law firm of Severson & Werson P.C., where he practiced for 17 years. With Severson & Werson P.C. he specialized in all aspects of consumer finance law, including regulatory compliance, mortgage and auto finance, licensing, the development of multistate direct and indirect lending programs. He earned a J.D. from Boston College in 1982 and a BA from the University of Massachusetts at Amherst in 1978.

So, riddle me this Mr. Giedgowd…you wield the grand title of “Chief Compliance Officer” and you have been working in this field for 22 years, including 17 years at a law firm where you specialized in all aspects of consumer finance law, including regulatory compliance, licensing and the development of multistate lending programs?

How could it have taken you three years, a Cease & Desist from the SEC and a $1 Million fine from the NASAA to make you realize you were selling unlicensed securities?

What did you make of what happened to Zopa?  I am being told that Prosper executives had regular contact with them during their attempts to launch their platform.  You knew what regulatory issues they were facing.  Prosper and Zopa even had some of the same financial backers.  I am even being told that a verbal agreement existed between Prosper and Zopa to not criticize each other in public.

It will be interesting to read how Mr. Giedgowd will respond to the Court summons.

In light of what appears to be an ongoing effort by Prosper Marketplace to remove potentially incriminating information from their blog, it is worth noting that legal counsel retained by a group of Prosper lenders put Prosper Marketplace on notice already back in June of 2008, instructing Prosper to preserve myriad types of potential evidence.

For those interested, a copy of the letter is attached.

Dear Mr. Giedgowd: 

Although my previous letter should have sufficed, in order to prevent any misunderstanding, I send this letter to place you on formal notice that a lawsuit against Prosper Marketplace, Inc. will soon be filed.  Accordingly, please direct PMI to preserve all evidence, including, without limitation, all electronic records, email communications (including, without limitation, reports made by members with respect to particular listings and communications between PMI employees and individuals about particular loans or policies), records provided by PMI’s collection agencies, the spreebb forums maintained by Prosper until November, 2007, the current Prosper forums, the blogs and comments, and any other potential evidence of any kind whatsoever.  This includes the immediate cessation of any normal data destruction, including the reuse of any backup media.