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What was the nature of Prosper’s “settlement” with the SEC?

March 9, 2009

Prosper lender Fred93 recently obtained a copy of Prosper’s proposed “settlement” with the SEC.  Even better, Fred93 has published access to a copy of the actual “Cease & Desist Order,” which provides interesting insight into the SEC’s thinking.

Fred93’s blog continues to be well worth regular visits.

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4 Comments leave one →
  1. March 10, 2009 6:14 am

    For the unaware – what is the gist of the order? Will Propser return to P2P lending or are they on another path?

  2. March 10, 2009 8:59 am

    Hi Joseph- Briefly, the gist is that the SEC considers Prosper loans to be securities. Since Prosper has not registered the loans as such, Prosper has been selling unregistered securities.

    As for their future, it’s impossible to say. Prosper’s recent S-1 filings do shed some light on how Prosper may envision its future.

  3. Brendan permalink
    March 25, 2009 1:00 pm

    I am a leaner on prosper and I was not contacted about this. Any suggestions?

    • March 25, 2009 3:03 pm

      The settlement in question was between Prosper and the SEC, resulting in Prosper temporarily ceasing operations. The pending class action suit is a separate issue. The suit has not yet been granted class status. It is reasonable to expect that all lenders will be contacted at the appropriate time.

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