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[bamalucky]

Andrew's right of offset jumps out at me right off.Thats around the time he quit communicating at all when he didn't deliver.

[onthefence]

@ira01 I am more than happy to accept you more knowledgeable opinion on the matter.

[NewHorizon]

Getting caught up in lawsuits does indeed raise levels of cynicism.  But  IIRC, Andrew was always wary in the old forums about promising more than would, in the end, be delivered.  Then, when he saw that Prosper was fulfilling less and less of the things Andrew forecast, he may have decided to start erring on the side of silence.

So I see it as playing it ultra-safe rather than conspiring to perpetuating lies.

[bamalucky]

Then, when he saw that Prosper was fulfilling less and less of the things Andrew forecast

I thought Andrew was in charge back then?

[onthefence]

I never thought that prosper andrew was in charge.  He appeared to be a tech geek and not a marketing/pr/customer service person.  This enabled him to communicate in a straight forward no bullshit way that engended a lot of trust.  This is sad.  The person not trained in dealing with people kicked ass at it.  Sure marketing/pr/customer service people can fool many people in the short term.  But your customers will heavily resent you after the fact.

[mtnchickatstore]

I agree, I don't think Andrew was ever "in charge". From what I could tell they found a likable person who could be fair when dealing with everyone and put him in as the Face of Prosper once they started losing credibility. I hope he lands somewhere good and with better pay.

[NewHorizon]

I got the impression that altho' he wasn't in charge, he had a huge hand in starting up the company.  Now the Prosper has gone from build-up to shore-up, his day-to-day activities have morphed accordingly.

[Xenon481]

I was under the impression that Andrew was in charge of *how* programming things got done, not *which* programming things got done.

[ira01]

What criteria did Prosper use to pick the 66 test cases? One would think they would have at least picked people they could find

They were California loans and loans that Sheriff DoFu had hand-picked as particularly winnable, so he could establish a strong legal precedent.

This is all indeed puzzling.  How the hell could they screw this up so badly?

My theory is that Doug Fuller knew what he was doing, but Chris Larsen wouldn't let him spend enough money to do it right.  A resource allocation problem.  Underfunding.  Starvation.

That's certainly possible, although the collections attorneys' handling the NAT are being paid on a contingency, so that isn't costing Prosper anything.  The retainer agreement probably requires Prosper to pay costs, though, which would include not only the "fixed" costs like the filing fees, but also the costs of serving the defendants.  So I suppose that Prosper could have refused to pay enough to get that done, although those costs really aren't very high, so that seems unlikely to me.  I'm kind of baffled by what went wrong with the NAT, although I would sure like to know.  I think it may be more likely that Prosper was no more responsive to its collections attorneys than it was to its lenders, so every time the attorneys called Prosper and said "we need some more information," Prosper didn't bother to call back.  So things fizzled.  But who knows?

[msava]

The semi-quiet period really sucks. At the very least, lenders should be updated on collection proceedings. Prosper should use that uninformative blog and explain in their plain English pithy way, just what's happening with our money.

[onthefence]

Prosper's quite period is self imposed.  And it is going to bite them in the rear.  About the only thing possible that could head off this tsunami of a class action suit is to be honest, up front and communicate with lenders in a way that they can believe them.  A level of communication that has not been seen since the early days of prosper (back we people still loved them).

[beerbud1]

Prosper's quite period is self imposed.  And it is going to bite them in the rear.  About the only thing possible that could head off this tsunami of a class action suit is to be honest, up front and communicate with lenders in a way that they can believe them.  A level of communication that has not been seen since the early days of prosper (back we people still loved them).

Too Late for that.

[Mark12547]

... About the only thing possible that could head off this tsunami of a class action suit is to be honest, up front and communicate with lenders in a way that they can believe them.

At least one class action suit has already been filed based on the sale of unregistered securities.

The honesty that you suggest is what, to at least some degree, registering Prosper's Notes would have given us as a requirement of the registration process: a reasonably accurate assessment of the risks and returns of investing in Prosper's Notes, instead of the photoshopped listings and misleading advertisements and, for a good part of the first year, a very material misrepresentation of the risks of investing in Prosper Notes by showing us Experian's "average annualized default rate for all bank card products" months after those who ran screen scrapers warned us that default rates were running two to three times higher than Experian's numbers.

[Urbi_et_Orbi]

Recall that Chris Larsen was running around to the press claiming a 2% default rate, without stipulating that those numbers represented pure fantasy.

[ira01]

Recall that Chris Larsen was running around to the press claiming a 2% default rate, without stipulating that those numbers represented pure fantasy.

Well, maybe not "pure fantasy," but certainly a highly misleading calculation -- counting only the 4++month lates that had actually been sold to the JDBs as "defaults," coupled with using ALL originations to date in the denominator (even though much of that loan volume was too young to have defaulted even if the borrower never made a single payment).  Exactly the type of misleading calculation that the SEC doesn't allow for registered securities.