So then where's the sanction (i.e penalty) for the regulators in all the states that allowed Prosper to "illegally" sell the "unregistered securities" and failed to protect investors (if that's their charter). It's not like Prosper didn't go state by state and ask them. 40+ states were all wrong on the same issue? That doesn't inspire confidence in the oversight organization. We all saw the process where initial Prosper was available to issue loans in some states and later in more...
That is certainly an interesting point.
A securities regulator would probably respond that they never "allowed" Prosper to do anything since Prosper never made any attempt to register their securities.
To the extent that Prosper had state licenses, they were lending licenses only. Prosper made loans (either themselves or through a banking partner) which was all that their lending licenses allowed them to do.
Prosper's interaction with the so-called "lenders" (i.e., us) was where they went wrong. When Prosper entered into an agreement to pay a portion of principal and interest on the loan to "lenders" in exchange for a payment/investment from the "lender," they created a security. Prosper never asked permission from any state or federal agency to do this, they just did it.
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Topic: NASAA announces: National Settlement with Prosper Marketplace, Inc. (Read 59881 times)