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.