hey guys, this is muleshoes. having a hard time distinguishing the basis of the lawsuit - is it mainly prospers misrepresentation of the risk involved? the securities issue (a technicality, right?) ? anything else...? having trouble figuring out the crux of the issue, sorry...
The class action lawsuit is only on the SEC issue -- that the "Notes" Prosper sold the lenders were unregistered securities that Prosper sold illegally (and that it must, therefore, repurchase for full face value plus statutory interest).
Given all the bad stuff that Prosper has done to lenders, the CA lawsuit is akin to trying to nail Al Capone for tax evasion: the more serious crimes were murder, extortion, racketeering, election fraud, and jury tampering.
The net result was the same--a bad guy got sent to prison and had to pay a big fine (though not to the victims).
