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[xraider]

This is intended for all who come wondering if they should participate in Prosper -- or those who are not members here.

There is a class action against Prosper for unlawfully offering its first group of loans (more than two years' worth) without making proper disclosures.  Prosper has now signed a number of consent decrees with the SEC and various states, and new offerings are made with new disclosures (such as, "we do nothing to protect lenders from risk" and "if there's a conflict of interest between lenders and us, guess who we'll favor"). 

In any event, there has been a class action pending against Prosper for several years, in the San Francisco Superior Court.  The class has been certified, and Prosper has recently been ordered to give notice to class members.  Information is posted here:  http://www.prosperclassaction.com/

In response, Prosper made a new SEC filing saying it might spin off Prosper into an LLC to protect the post-SEC lenders, screwing the original lenders.

I'm sure others will post links to the SEC and the court website.

[Xenon481]

Here is a link to the website for court ordered information on this class action lawsuit:

http://www.prosperclassaction.com/


Here is a link to the San Francisco Superior Court's website for all actions taken thus far in regards to this Class Action:

http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=IJS&PRGNAME=ROA22&ARGUMENTS=-ACGC08482329

[Beerbud1]

Nominate for Lobby!

[Xenon481]

Nominate for Lobby!

Seconded.

[nonattender]

...

[yankeefan]

I think it is telling that the documents filed by Prosper as defense are from the California lending regulators asking the SEC to be lenient in protecting investors (lenders) because Prosper provides below market rate loans, and loans to people who wouldn't qualify for loans normally.    No argument that what Prosper was selling to investors was compliant, but merely that "We regulating Prospers lending activities, you don't need to worry about its fund-raising side"

[Mark12547]

I just received this email:

NOTICE OF PENDING CLASS ACTION

HELLUM v. PROSPER MARKETPLACE, INC. and others, Case No. CGC 08-482329


IF YOU PURCHASED LOAN NOTES ON PROSPER.COM DURING THE PERIOD OF JANUARY 1, 2006 TO OCTOBER 14, 2008, YOU MAY BE A CLASS MEMBER IN A CLASS ACTION


YOU SHOULD READ THIS NOTICE CAREFULLY.  IT AFFECTS YOUR LEGAL RIGHTS AND OBLIGATIONS.


This notice is to inform you that on February 29, 2012, the court in the Hellum v. Prosper Marketplace, Inc. lawsuit granted Plaintiffs’ motion to certify a class as follows:

       All persons who purchased loan notes through Prosper’s loan underwriting and sales
       marketplace at www.prosper.com during the period from January 1, 2006 through October
       14, 2008, excluding Defendants, their employees, and members of Defendants’ families
       (the “Class”).


This notice is only a summary.  For more information, please visit www.ProsperClassAction.com.


What is this case about?  This lawsuit claims that Prosper offered and sold unqualified and unregistered securities, in violation of California and federal securities laws.  Plaintiffs also claim that Prosper acted as an unlicensed broker/dealer in California.  Plaintiffs seek rescission of the loan notes, rescissory damages, damages, and attorneys’ fees and expenses. 


Defendants deny the allegations made by Plaintiffs.  Defendants assert that the loan notes were not securities and were therefore not required to be registered or qualified for sale under California or federal law.  Defendants also assert that Prosper was not required to register as a broker/dealer.  Defendants are seeking dismissal of this lawsuit and deny that the Class is entitled to any monetary recovery or other relief.  Defendants are seeking a trial of this matter as soon as possible.


Who is a Class member? The Class of plaintiffs is defined above.


Who represents you?  The Court appointed The Rosen Law Firm, P.A. and Green & Noblin, P.C. to represent the Class.  They may be contacted through the administrator at 866-274-4004. You may hire your own attorney but you will have to pay that attorney.


What are your options?  You may choose to do nothing. By doing nothing, you remain a member of the Class and may be entitled to get money or benefits if Plaintiffs win at trial or settle the case.  Additionally, you give up any rights to sue Prosper or any of the other defendants based on the issues raised in this lawsuit, and you will be bound by all Court decisions and judgments, whether favorable to the Class or not. You may intervene in the lawsuit.  Any member of the Class who does not request exclusion may, if the member so desires, enter an appearance through counsel. You may request to be excluded from the lawsuit (“opt out”).  If you opt out, you will not be a Class member and you cannot obtain benefits from this lawsuit, if there are any, but you keep any rights you may have to file your own lawsuit based on the same issues.  To opt out, you must send an email on or before August 14, 2012, or a letter postmarked on or before August 14, 2012 to:

Prosper.com Securities Litigation
c/o Strategic Claims Services
600 N. Jackson St., Ste. 3
Media, PA 19063
www.strategicclaims.net
info@strategicclaims.net

Your email or letter must include your name, address, and, in substance, the following statement, “I request to be excluded from the Hellum v. Prosper Marketplace, Inc. lawsuit, Case No. CGC 08-482329.” 


For more information, please visit www.ProsperClassAction.com, or call 1 866-274-4004.


The Superior Court of the State of California, County of San Francisco, has ordered this email notice be sent.  If you wish to UNSUBSCRIBE from any future email messages from the Claims Administrator with regard to this Litigation, please click on this link.

[Greebo]

I just received this email:

Ditto

[xraider]

I have NOT received the email yet.  However, I call bullshit on Prosper's claim that it's pushing for an early trial date.

[DCS]

Me neither.  Maybe they're staggering the e-mails?

On a related tangent, I wonder if Prosper's class action will eventually show up on this site, as I'm not sure how thorough it is:
http://www.mysettlementclaims.com

[Xenon481]

I have not received the email.

I have my Prosper account settings set to not contact me, but this shouldn't count for those exclusions.

[112233]

any ramifications if a company doesn't notify eligible class members they have contact info for?

[xraider]

Yes.  Any settlement/resolution would not be binding on those members.  I called one of my class action dudes and left him a message.  I'll post if there's anything to add.

However, Prosper still has 5 more days to notify us.

Maybe they haven't emailed me because they intend to try to stiff me of my $.76 again.   

[Urbi_et_Orbi]

If it makes anyone feel better, I have not received the email either.  The message is being sent out both via email and via regular mail - and there's still several days left before the deadline.  I am going to give it at least another week before i start to wonder if anything is wonky.

[Staneslav]

a