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[NewHorizon]

(oh come on, it was kinda of funny)

7 years building up to that?
(Prosper founded in 2006)

ETA: Isn't it ok by now to reveal any cozy arrangements you had with P1 as their fanboy...?

[bamalucky]

Since I never expected any more then I got/loss in lending this is a welcomed surprise.

BS... I'll not elaborate here but I seem to recall you being very thick with them & even touted an eventual 6 figure group leader income.

[112233]

I appreciate the efforts of all parties involved.  This (lending on Prosper) was a valuable education in the human spirit which in itself is priceless.  Since I never expected any more then I got/loss in lending this is a welcomed surprise.  I will make sure to take the settlement I receive and use it towards the purchase of a


wait for it

wait for it

Big Gulp.
(oh come on, it was kinda of funny)

-Gulp
 

add your prosper options and get something fancy

[BigGulp]

(oh come on, it was kinda of funny)

7 years building up to that?
(Prosper founded in 2006)

ETA: Isn't it ok by now to reveal any cozy arrangements you had with P1 as their fanboy...?

Actually it wasn't as big of a deal (at least in my opinion).  Since I was their fanboy (by there admission) a friend of mine suggested I ask for some sort of compensation.  So I asked.  They came back with 1000 options and I agreed.  There was no other stipulations to the agreement.  I didn't have to do anything or say anything.  I just asked and they said yes. 

Not as exciting as many have made it sound over the years, never hurts to ask.  If I remember correctly this was after the first Prosper Days, so there wasn't any expectation from them on what my future actions would be (at least I wasn't made aware of any).

To this day I still ask for options to companies I work at/for and any company I do consulting for.  Sometimes I get some, some times I don't.  It's just another way to get a return on investment.  I've found that most companies hand out options more freely than not, since it doesn't cost them anything.

-Gulp
 

[msava]

$10M isn't a "cave," it is a reasonable settlement.

$10M sounds like a reasonable amount to you because being smarter than the average Prosper investor, you only lost less than $100. The stoopid people like me, that lost a heck of a lot more, are really concerned there will not be enough money in the $10M pot to make us even close to whole.

I'm not complaining because going into this investment, I knew it was a high risk deal. In fact, originally I was against suing Prosper. Then all the underhanded things they started doing and the constant lies, changed my mind. My only regret is that Xraider was not one of the lawyers on the case.

[msava]

Since I never expected any more then I got/loss in lending this is a welcomed surprise.

BS... I'll not elaborate here but I seem to recall you being very thick with them & even touted an eventual 6 figure group leader income.

Speaking of group leader income, how will that be factored into our possible winfall?

[msava]

(oh come on, it was kinda of funny)

7 years building up to that?
(Prosper founded in 2006)

ETA: Isn't it ok by now to reveal any cozy arrangements you had with P1 as their fanboy...?

Actually it wasn't as big of a deal (at least in my opinion).  Since I was their fanboy (by there admission) a friend of mine suggested I ask for some sort of compensation.  So I asked.  They came back with 1000 options and I agreed.  There was no other stipulations to the agreement.  I didn't have to do anything or say anything.  I just asked and they said yes. 

Not as exciting as many have made it sound over the years, never hurts to ask.  If I remember correctly this was after the first Prosper Days, so there wasn't any expectation from them on what my future actions would be (at least I wasn't made aware of any).

To this day I still ask for options to companies I work at/for and any company I do consulting for.  Sometimes I get some, some times I don't.  It's just another way to get a return on investment.  I've found that most companies hand out options more freely than not, since it doesn't cost them anything.

-Gulp
 

Wondering the strike price of those options?

[ira01]

$10M isn't a "cave," it is a reasonable settlement.

$10M sounds like a reasonable amount to you because being smarter than the average Prosper investor, you only lost less than $100. The stoopid people like me, that lost a heck of a lot more, are really concerned there will not be enough money in the $10M pot to make us even close to whole.

That is completely irrelevant, for several reasons.  The biggest probably being that of course $10M won't make the big losers close to whole.  But the class action only addressed one of Prosper's many shortcomings -- it's failure to register its securities before selling them.  Had it done so, total losses would have been less, but they wouldn't have been zero -- there are many reasons why lenders lost money on Prosper, so it isn't reasonable to expect to be made whole from this lawsuit. 

Moreover, it also isn't reasonable to expect ANY settlement (without a substantial possibility of large punitive damages, which isn't an issue in this case) to make lenders whole or close to it (i.e., recoup all aggregate lender losses), because that would be the maximum possible amount that Prosper could lose if it took the case to trial and lost, assuming everything went well for the plaintiffs.  But by definition, a settlement is a compromise.  It always falls somewhere between the best case plaintiff scenario and the best case defense scenario.  Here, it is possible that had the case gone to trial, plaintiffs would have lost.  Or even if they won, they may not have won enough to cover all lender losses.  And even if they did, the case could be tied up on appeal for many years, during which time plaintiffs would get nothing.  Or perhaps Prosper would go BK and plaintiffs would get little or nothing.  All of that has to be factored into the settlement calculation.  Since Prosper's maximum exposure was about $40M is I remember correctly, the settlement is 25%, paid relatively quickly.  That is a very good settlement as these things go.  A common class action settlement involves near worthless compensation to the class, such as the infamous "coupon" settlements, and even a cash settlement is often 10% or less of the possible judgment amount.  So 25% is quite good. 

[ira01]

The proposed settlement agreement has been modified.  http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=WEB&PRGNAME=ValidateCaseNumber&ARGUMENTS=-ACGC08482329

The maximum payments to the Claims Administrator for expenses has been increased to $430,000, and the method of allocating payments to class members has been altered.  Class members with any loan on which they incurred a loss are eligible for payment, regardless of how they did overall.  And payments are made by direct bank deposit, rather than to Prosper accounts, for those for whom Prosper has bank info that has been used within 6 months, and by check otherwise. 

[NewHorizon]

Class members with any loan on which they incurred a loss are eligible for payment, regardless of how they did overall.  

Seems like a tweak toward being a little more fair even if lenders under the old settlement would get even less now because there are more award recipients.

But alas, I still don't get how $0 is seen as such a magical ROI number even when looking at individual loans now instead of overall portfolios.  I mean if the logic is that Prosper's actions caused, at least in part, lenders to enter into defaulting loans, but a few lenders nevertheless eked out a positive ROI for a few of those defaulted loans (because the loan defaulted near the end of the 3-year term), doesn't the logic suggest that even for those loans, Prosper "damaged" the ROI?

[mothandrust]

A common class action settlement involves near worthless compensation to the class, such as the infamous "coupon" settlements, and even a cash settlement is often 10% or less of the possible judgment amount.  So 25% is quite good. 

Interesting the lawyers never negotiate a settlement where they get near worthless coupons.

[DCS]

Thanks Ira.

An eligible recipient shall mean a Member of the Class who purchased one or more loan notes through Prosper's lending platform during the class period ("Class Period Notes") and who paid more consideration than he or she received in principal and interest with regard to any one or more of the Class Period Notes purchased by that class member.

So, is there any section that explains how the money will be distributed among eligible lenders?  (i.e. based on # of notes or amount lost?)

[ira01]

A common class action settlement involves near worthless compensation to the class, such as the infamous "coupon" settlements, and even a cash settlement is often 10% or less of the possible judgment amount.  So 25% is quite good. 

Interesting the lawyers never negotiate a settlement where they get near worthless coupons.

A judge once tried that.  He was overturned on appeal, and if I recall correctly, the appellate court chastised him and transfered the case to a new judge on remand. 

[ira01]

Thanks Ira.

An eligible recipient shall mean a Member of the Class who purchased one or more loan notes through Prosper's lending platform during the class period ("Class Period Notes") and who paid more consideration than he or she received in principal and interest with regard to any one or more of the Class Period Notes purchased by that class member.

So, is there any section that explains how the money will be distributed among eligible lenders?  (i.e. based on # of notes or amount lost?)

Yes.  That part didn't change, so it is set forth in the original settlement agreement.  Basically based on amount lost. 

[Xenon481]

Thanks Ira.

An eligible recipient shall mean a Member of the Class who purchased one or more loan notes through Prosper's lending platform during the class period ("Class Period Notes") and who paid more consideration than he or she received in principal and interest with regard to any one or more of the Class Period Notes purchased by that class member.

So, is there any section that explains how the money will be distributed among eligible lenders?  (i.e. based on # of notes or amount lost?)

This version is more amenable to me.