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Author Topic: Prosper class action update (for lobby)  (Read 138564 times)

ira01

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Re: Prosper class action update (for lobby)
« Reply #120 on: June 05, 2012, 11:04:03 am »

But how, exactly would lenders be aware that we are defrauded?  Take Prosper's 100% ID theft guarantee. 

We wouldn't "know" unless we were able to examine Prosper's files, which could only happen if we filed a lawsuit and via discovery were able to pore through documents. 

You don't have to "know" to a certainty to start the SOL running -- otherwise, virtually no claim would ever start an SOL of this type.  You just have to be aware of sufficient facts to put you on notice that your rights may have been violated, because the idea is that then you are supposed to investigate, not sit on your rights.  And given that the third-party data sites made public the information that Prosper really wasn't repurchasing loans under its identity-theft guarantee (except for a handful of loans involving public shitstorms and the dozen or so Crawford loans), that would probably do it.  Also, the identity-theft guarantee issue is probably more a breach of contract claim (for which the SOL starts running at the breach, regardless of knowledge) than a fraud claim, because fraud requires proving that Prosper made the misrepresentations at a time it knew that they were false, which would probably be pretty tough to prove with respect to the identity-theft guarantee for most P1 lenders. 
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xode

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Re: Prosper class action update (for lobby)
« Reply #121 on: June 05, 2012, 11:21:42 am »

...
As always, this is not legal advice.  If you want legal advice, see (and pay) a lawyer.

Thank you for admitting that, for you, it is all about putting people between a rock and a hard place and then taking from them everything that you possibly can.  In general, this is how I have seen attorneys behave.
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ira01

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Re: Prosper class action update (for lobby)
« Reply #122 on: June 05, 2012, 11:28:36 am »

...
As always, this is not legal advice.  If you want legal advice, see (and pay) a lawyer.

Thank you for admitting that, for you, it is all about putting people between a rock and a hard place and then taking from them everything that you possibly can.  In general, this is how I have seen attorneys behave.

Do you work for free?
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Staneslav

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Re: Prosper class action update (for lobby)
« Reply #123 on: June 05, 2012, 02:20:12 pm »

a
« Last Edit: November 29, 2017, 11:46:56 am by Staneslav »
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Roadhawk

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Re: Prosper class action update (for lobby)
« Reply #124 on: June 05, 2012, 06:17:19 pm »

Got my snail mail today....
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havastat

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Re: Prosper class action update (for lobby)
« Reply #125 on: June 05, 2012, 08:35:40 pm »

The securities claims have three characteristics: they are pretty strraight forward, they are strict liability (the class doesn't have to prove Prosper acted with any bad intent or was at fault), and they have fee-shifting provisions -- the defendants pay the plaintiffs' lawyers if they win.

As lots of people have said here, these aren't the issues that have gotten people the most angry at Prosper. They're pretty tame compared to some of people's beefs. But they may well be the issues most likely to win on summary judgment or with a short trial, and the ones where the lawyers are most likely to get paid.

And all this may well be in the class's interests. Fraud claims may be hard to prove, and they may be unsuccessful after a lot of lawyers' and calendar time wasted. The securities claim may well reflect a sober consideration of what would offer the class the most bang for the buck.

That said, claims that give the lawyers the best shot at fees with the least work would seem to be in the lawyers' interests whether or not in the class's. Perhaps there's really a commonality of interest here, perhaps not.

I'm not a lawyer, so I can't speak to what the statutes of limitations are or whether they've expired. If they have, the train on other lawsuits may well have already left the station, and this one be the only thing still running for better or worse.
« Last Edit: June 06, 2012, 07:48:22 am by havastat »
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ira01

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Re: Prosper class action update (for lobby)
« Reply #126 on: June 05, 2012, 08:57:22 pm »

and they have fee-shifting provisions -- the defendants pay the plaintiffs' lawyers if they win.

Are you sure about that?  Except for one of the state law claims asserted against Prosper, it doesn't look like the other claims do have fee shifting provisions according to the Complaint.  Class counsel would be compensated out of the pool of money they recover for the class on the other claims. 
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msava

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Re: Prosper class action update (for lobby)
« Reply #127 on: June 06, 2012, 01:06:24 pm »

...
As always, this is not legal advice.  If you want legal advice, see (and pay) a lawyer.

Thank you for admitting that, for you, it is all about putting people between a rock and a hard place and then taking from them everything that you possibly can.  In general, this is how I have seen attorneys behave.

This is not a play room Xode. Some of us have a lot vested in getting quality information about the situation. I thought you were also a lender.
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Capital_Finance_Group

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Re: Prosper class action update (for lobby)
« Reply #128 on: June 06, 2012, 02:28:26 pm »

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers. These days lawyers list agreeable aquaintences as plaintiffs willing to be figureheads in a suit that ends with the lawyers getting big fees, and the class getting maybe a $5 coupon off a new purchase as their "relief."

Do we have any reason to think this class action won't turn out that way? Will the class action lawyers actually work for the class's interest here? Why?

I'll second this.  One item that will help newbies know who these plaintiffs are is for these plaintiffs to publicly post their Prosper screen names.

Got mine.

One question newbies might want to know is, who are these plaintiffs?

It's not uncommon for class actions these days to be started by lawyers for the benefit of lawyers.

At least two of the class representatives are long time Prospers.org members who still post here regularly.  Neither knew the lawyers representing the class before the class action (one of those lawyers came here looking for plaintiffs shortly after the SEC's cease and desist letter against Prosper). 

And now you can do me the courtesy of posting the Prosper screen names of the lead plaintiffs for this case here so that I can know who these lead plaintiffs are.


Good Luck! No one here is going to help you! Try doing some indepandant research! Why would anyone post that info. in The Lobby?

FWIW - I have been able to use pieces of information that came to me in various ways to match the names on the Suit to at least one member of these boards. There is no way I would post that information on any web board, public or not. Personally I greatly appreciate those that have stepped forward for the rest of us. BTW - I am not a named person on the suit.
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havastat

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Re: Prosper class action update (for lobby)
« Reply #129 on: June 07, 2012, 07:13:43 am »

But how, exactly would lenders be aware that we are defrauded?  Take Prosper's 100% ID theft guarantee.  

We wouldn't "know" unless we were able to examine Prosper's files, which could only happen if we filed a lawsuit and via discovery were able to pore through documents.  

You don't have to "know" to a certainty to start the SOL running -- otherwise, virtually no claim would ever start an SOL of this type.  You just have to be aware of sufficient facts to put you on notice that your rights may have been violated, because the idea is that then you are supposed to investigate, not sit on your rights.  And given that the third-party data sites made public the information that Prosper really wasn't repurchasing loans under its identity-theft guarantee (except for a handful of loans involving public shitstorms and the dozen or so Crawford loans), that would probably do it.  Also, the identity-theft guarantee issue is probably more a breach of contract claim (for which the SOL starts running at the breach, regardless of knowledge) than a fraud claim, because fraud requires proving that Prosper made the misrepresentations at a time it knew that they were false, which would probably be pretty tough to prove with respect to the identity-theft guarantee for most P1 lenders.  

In order to get within the statute of limitations, the suit claims no-one in the class had any idea that Prosper notes were securities until after the SEC rendered its decision. It claims the SOL is either 1 or 2 years. I think a practical difficulty with the arguments people have been making that Prospers' actions in offering unregistered securities showed fault, knowing disregard for the law, etc. is that if it was really so obvious to Prosper that the notes were securities long before the SEC action and there was really so much publicly available information showing that they were, then Prosper could argue (and I suspect will argue) that this same information also establishes that the status of the notes as securities should also have been obvious to the class long before the SEC decision. And if Prosper could show this, it could argue that the statute of limitations began running considerably earlier than the suit claims and potentially early enough to put all or a good portion of the notes outside the SOL's scope.

In other words, if the class argued that Prosper acted wrongly or with wrong intent, it might well end up arguing itself out of court. To justify  waiting to file a claim until after  the SEC decision in 2008 rather than suing within 2 years after Prosper first began offering the notes, the suit claims that the securities status hit everyone like a bolt out of the blue, completely unpredictable beforehand. But by claiming this, it also makes Prosper appear much more sympathetic than a suit for fraud or something similar.  

If the securities status really was a bolt out of the blue, not knowable or predictable by the parties beforehand, as the lawsuit claims, then there's nothing in the lawsuit that makes Prosper in any way evil. It's being accused of nothing more than making an innocent mistake that just happens to be subject to a strict-liability gotcha type law.  The lawsuit will give no emotional satisfaction, no emotional justice, to people who feel they've been defrauded or their contracts ignored and would like to hear a judge declare that Prosper knowingly did wrong. It goes after Prosper for what the lawsuit itself claims was nothing more than a simple mistake.  
« Last Edit: June 07, 2012, 07:17:40 am by havastat »
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ira01

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Re: Prosper class action update (for lobby)
« Reply #130 on: June 07, 2012, 10:44:43 am »

Except that Prosper billed itself as the expert, and constantly assured lenders that registration was not necessary.  As amateurs, lenders were entitled to rely on Prosper's assertions, until the SEC made it clear that Prosper was full of shit.  A defendant doesn't get to mislead potential plaintiffs into letting the SOL run, and then claim its protection. 
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rogerwaite

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Re: Prosper class action update (for lobby)
« Reply #131 on: June 07, 2012, 10:53:24 am »

+1
I didn’t know the promissory note I bought was a security. The SEC’s own Education web page investor.gov has a simple primer for new investors. Its glossary has this definition:

Security—A stock, bond, or another investment.

On the main page it lists these things as investment products:

Investment Products

"While the SEC cannot recommend any particular investment, you should know that a vast array of investment products exists – including stocks and stock mutual funds, bonds and bond mutual funds, lifecycle funds, exchange-traded funds, certificates of deposit, money market funds, and annuities.
This section describes some of these investment products, explains how they are bought and sold, and details their benefits and risks. You’ll also find information on fees and tips to avoid fraud.
Please use the menu to the left to learn more information about each of the products.
Investment Products
Stocks
Bonds
Municipal Bonds
Mutual Funds
Exchange-Traded Funds (ETFs)
Annuities
Certificates of Deposit (CDs)
Money Market Funds
Commodities
Hedge Funds
Real Estate Investment Trusts (REITs)
International Investing"

Among those things I know how to buy a certificate of deposit and an annuity. The other stuff was out of my league. I did know how to loan someone money on an informal basis. And I had certainly borrowed money, so I knew how that worked.  Prosper provided a simple way for me to reverse the role.  Even though I was technically a loan purchaser the ‘Lender’ term used “for the sake of brevity and simplicity” in my Lender Registration Agreement helped me feel the concept was less bound with legalities. So it was a surprise to me that the notes needed to be regulated by the SEC.  Then in retrospect I see Prosper was too informal about their end of the bargain with respect to servicing the 50% of my loans that defaulted. Really robbed me of part of my ‘mission’ in participating in P2P, i.e. helping fellow consumers like me.

My $400 loss is not enough of itself to go to court over.  But I appreciate the opportunity to be part of the class. The securities claims seem the appropriate way to handle it. The .org threads are the appropriate place to vent about other underlying issues. In court, it’s about business, on .org it’s personal.

edit: corrected 3rd sentence, 2nd to last par.
« Last Edit: June 07, 2012, 11:55:47 am by rogerwaite »
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mothandrust

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Re: Prosper class action update (for lobby)
« Reply #132 on: June 07, 2012, 10:53:44 am »

The lawsuit will give no emotional satisfaction, no emotional justice, to people who feel they've been defrauded or their contracts ignored and would like to hear a judge declare that Prosper knowingly did wrong. It goes after Prosper for what the lawsuit itself claims was nothing more than a simple mistake.

The discovery asked for by the plaintiffs is extensive and (if the court approves and Prosper complies) could result in a lot of bad stuff coming to light.
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So all those people who ran in the primary, dropped out, and endorsed the eventual winner who wind up in every cabinet is just a coincidence?
Yes.  They drop out because they realize they cannot win and staying in will hurt their future prospects.  If they later wind up with a job, that's fine.  But that's not remotely the same as a quid pro quo.

ira01

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Re: Prosper class action update (for lobby)
« Reply #133 on: June 07, 2012, 10:57:54 am »

The discovery asked for by the plaintiffs is extensive and (if the court approves and Prosper complies) could result in a lot of bad stuff coming to light.

Have you seen it?  Because I haven't, but would like to.  My guess is that it isn't nearly as extensive as you think, since even though discovery is pretty broad, it still has to be related to the claims in the suit.  And since the lawsuit is solely limited to the strict liability securities claims, discovery about Prosper's other bad conduct is likely to be too far afield. 
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mothandrust

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Re: Prosper class action update (for lobby)
« Reply #134 on: June 07, 2012, 01:29:28 pm »

The discovery asked for by the plaintiffs is extensive and (if the court approves and Prosper complies) could result in a lot of bad stuff coming to light.

Have you seen it?  Because I haven't, but would like to. 

It includes a complete copy of the Prosper website and all their files, emails, etc. 

Such records would include names and addresses and SSN's of all Prosper lenders and borrowers, copies of signatures, all that good stuff.

No, I haven't seen it.  Who gets access to it?  Plaintiff's lawyers, lead plaintiffs?  What's to stop a copy from getting posted on the internet?
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So all those people who ran in the primary, dropped out, and endorsed the eventual winner who wind up in every cabinet is just a coincidence?
Yes.  They drop out because they realize they cannot win and staying in will hurt their future prospects.  If they later wind up with a job, that's fine.  But that's not remotely the same as a quid pro quo.
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