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State of Washington Sanctions Prosper

July 1, 2009

The State of Washington’s Department of Financial Institutions, Securities Division has issued a Consent Order, sanctioning Prosper Marketplace for violating the Securities Act of Washington.

The Securities Division tentatively found that Respondent Prosper Marketplace offered and sold investments in the form of small loans through its website. Approximately 1,860 Washington State residents invested $6,452,422 in these loans. The Securities Division tentatively found that Respondent Prosper Marketplace violated RCW 21.20.010, the anti-fraud provision of the Securities Act of Washington, by failing to disclose material facts of the investment, including details of the company’s business model and the risks of the investment

Respondent Prosper Marketplace waived its right to a hearing and to judicial review of this matter and pay a $36,025 fine.

Finally, Prosper agreed to to cease and desist from violating RCW 21.20.010, the anti-fraud section of the Securities Act of Washington.

The actual document can be read here.

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