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Prosper Shuts Down…Again

May 9, 2009

Prosper just issued the statement re-produced below.  After you peel away the PR-puffery and mis-direction, it looks like the SEC didn’t look too kindly on Prosper re-opening prior to completing their review.

We have been overwhelmed by the outcry from potential investors around the country who want to participate in peer-to-peer lending. Therefore, after much consideration we have decided to voluntarily shut down our operation in order to complete our SEC approval for a nationwide peer-to-peer lending platform.

Your current lender agreements will be unaffected; your existing loans will continue to be serviced; you’ll be able to track and monitor your loans; and you’ll be able to withdraw funds from your Prosper account.

As a result of this decision, we will not be accepting new lender or borrower registrations or loans, or new commitments from existing lenders effective immediately. Until this process is complete, we are required to be in a quiet period and will be unable to respond to press, blogger or other inquiries related to our SEC registration process, even though we would like to.

We want to assure you that Prosper is looking forward to being able to offer a transparent, durable and participatory lending institution very soon.

We sincerely apologize for this inconvenience or disappointment our decision may have caused. We want to thank you for your continued support and patience. We look forward to serving the needs of the community in the hopefully not too distant future.

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