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Author Topic: Prosper Class Action Suit Settled for $10 Million Over 3 Years  (Read 207160 times)

DCS

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #30 on: July 24, 2013, 04:33:27 pm »

Seeing the method by which the money will be allocated to lenders will be very interesting.  There are any number of ways that might make sense (each of which will be better for some lenders, and worse for others).  Youve already noted two possibilities -- by money invested or by money lost.  But another possibility is by number of loans made.

I personally would make out best if either money invested or number of loans made are used, but I think using money lost would be fairest.  In 2006 I remember expecting to beat CD rates by a few percent with my Prosper loans, and my final ROI was closer to matching CD rates at the time - somewhat of a disappointment but not horrible. While I recognize Prosper should have played by SEC rules, I dont feel like I personally suffered a great loss because of that. Anything I do get from the class action will be gravy, but I hope those who lost the most get the most.
« Last Edit: July 24, 2013, 04:36:28 pm by DCS »
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TJGbank

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #31 on: July 24, 2013, 08:44:35 pm »

Will these be cash payments, or a credits towards bidding on Prosper listings?

Better be cash -- Ill file objections to the settlement if they are credits towards bids. 

I agree.  Credits toward bids are worthless to me and, I suspect, to most class members.
But, but wouldnt the suspensions be lifted  as per the nudge
Especially those of us who are banned.

Somebodys been taking quoting lessons from MsA
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havastat

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #32 on: July 24, 2013, 10:25:56 pm »

I think money lost would be fairest as well.

Although the suit is over unregistered securities and this applies whether the loans paid back or not, nonetheless people whose loans didnt pay lost more than people whose loans did. Repayments can be regarded as a sort of setoff against claims.

It remains to be seen how much of the settlement money will end up in the hands of the lawyers.

I think settling for a fraction of the original claim was a smart move on Prospers part. It removes a huge cloud of uncertainty hanging over its future, and enables Prosper to seek new investors based only on its performance, without this additional can of worms.
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ira01

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #33 on: July 25, 2013, 12:48:58 am »

I think money lost would be fairest as well.

Although the suit is over unregistered securities and this applies whether the loans paid back or not, nonetheless people whose loans didnt pay lost more than people whose loans did. Repayments can be regarded as a sort of setoff against claims.

Although I dont necessarily disagree, the counterpoint to that is that many people whose loans did especially badly bear some (or a lot) of the blame for that.  Exhibit A is Muleshoes -- why should he get more (and everyone else get less) because he was a freaking idiot?  Or why should people who decided that a portfolio average credit grade of HR was a brilliant idea get more than people who were more prudent, and invested in higher quality loans? 

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It remains to be seen how much of the settlement money will end up in the hands of the lawyers.

Wasnt the original plan 40%?  Ultimately it will be up to the court to set the amount of the fees, but I would expect them to be around that. 
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msava

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #34 on: July 25, 2013, 09:05:07 pm »

Will these be cash payments, or a credits towards bidding on Prosper listings?
Cant be credits, FL not allowed to loan any longer.
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cwsswc

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #35 on: July 25, 2013, 11:16:57 pm »

You know, as much as I appreciate whatever Ill get from this settlement, it sort of bugs me that it means that Ill have at least three more years of having to be connected with Prosper in some way, shape or form. In all seriousness, I would have been much happier had Prosper sold off my non-performing loans per its original terms (or even allowed me to put the non-performing loans to them for $0.01 or some nominal amount) and let me walk away with my easily documented losses. I would probably have put the whole thing behind me, chalked it up as a learning experience, and moved on.

Instead, I was stuck in limbo for years as some zombie loans paid pennies on the dollar. Not only did that force me to continue to sign in to the site to clear out the pennies, it kept me having to do tax entries and keep incredibly detailed records every year to keep it all straight. It was a much more frustrating and time consuming experience than it needed to be, and the pennies on the dollar never even looked like they would come close to being worth the effort or frustration. Ive had investments perform far worse than my investing in Prosper ever did, and frankly, I only ever risked cash in Prosper that I was willing to consider as speculation. Still, even among my worse-performing investments, I dont think Ive ever had one so aggressively rub my face in its failings as Prosper has, though....
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ira01

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #36 on: July 26, 2013, 02:21:15 am »

You know, as much as I appreciate whatever Ill get from this settlement, it sort of bugs me that it means that Ill have at least three more years of having to be connected with Prosper in some way, shape or form. In all seriousness, I would have been much happier had Prosper sold off my non-performing loans per its original terms (or even allowed me to put the non-performing loans to them for $0.01 or some nominal amount) and let me walk away with my easily documented losses. I would probably have put the whole thing behind me, chalked it up as a learning experience, and moved on.

Just so you know, you will have the opportunity to "opt out" of the settlement, which means you wont have to worry about that problem. 
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cwsswc

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #37 on: July 26, 2013, 11:09:38 pm »

Just so you know, you will have the opportunity to "opt out" of the settlement, which means you wont have to worry about that problem. 

Thx for letting me know. I expect Ill be lazy enough to not "opt out". ;)
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Fred93

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #38 on: July 28, 2013, 04:03:38 pm »

Why is there nothing on the court docket about the settlement?

From my naive non-lawyer point of view, I presume that a settlement is the sort of thing the lawyers would have to tell the court about, in writing, so it would appear on the docket.

Am I just expecting things to move faster than they normally do?

msava

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #39 on: July 28, 2013, 06:05:19 pm »

You know, as much as I appreciate whatever Ill get from this settlement, it sort of bugs me that it means that Ill have at least three more years of having to be connected with Prosper in some way, shape or form. In all seriousness, I would have been much happier had Prosper sold off my non-performing loans per its original terms (or even allowed me to put the non-performing loans to them for $0.01 or some nominal amount) and let me walk away with my easily documented losses. I would probably have put the whole thing behind me, chalked it up as a learning experience, and moved on.

Just so you know, you will have the opportunity to "opt out" of the settlement, which means you wont have to worry about that problem. 
Is that required for all class actions?
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Beerbud1

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #40 on: July 28, 2013, 06:20:03 pm »

MsAva, all lawsuits offer the opportunity to opt out!
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Chamatrain

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #41 on: July 28, 2013, 06:22:21 pm »

MsAva, all lawsuits offer the opportunity to opt out!

Great! How bout the ones I lost?
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ira01

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #42 on: July 28, 2013, 06:25:01 pm »

Why is there nothing on the court docket about the settlement?

From my naive non-lawyer point of view, I presume that a settlement is the sort of thing the lawyers would have to tell the court about, in writing, so it would appear on the docket.

Am I just expecting things to move faster than they normally do?

I think the settlement hasnt been finalized yet, so there isnt anything to file on the Courts docket.  Eventually, a settlement agreement will be fully drafted and agreed to by the parties and lawyers, and then they will ask the court to give its preliminary approval to the settlement and to order that notice of the proposed settlement be given to the class.  Then there will be a period of time for people to object to the settlement, and then a hearing will be held for the court to give its final approval of the settlement.  That process is likely to be rather lengthy.  I wouldnt be surprised if it takes months before the parties seek preliminary approval of a settlement from the court, and many, many months for final approval.  
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Beerbud1

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #43 on: July 28, 2013, 07:04:25 pm »

MsAva, all lawsuits offer the opportunity to opt out!

Great! How bout the ones I lost?

You splitting hairs here, of course I was talking about all "CLASS ACTION"
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Fred93

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Re: Prosper Class Action Suit Settled for $10 Million Over 3 Years
« Reply #44 on: July 28, 2013, 07:25:02 pm »

I think the settlement hasnt been finalized yet, so there isnt anything to file on the Courts docket.  Eventually, a settlement agreement will be fully drafted and agreed to by the parties and lawyers, and then they will ask the court to give its preliminary approval to the settlement and to order that notice of the proposed settlement be given to the class....

Henry Kissinger, October 26, 1972
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"We believe that peace is at hand.  What remains to be done can be settled in one more negotiating session with the North Vietnamese negotiators, lasting, I would think, no more than three or four days.”

It isnt over til the fat lady sings.

Dont count your chickens until they hatch.

Kinda shocked me is that Prosper filed an 8K with the SEC, declaring the case settled, when it appears that maybe it isnt really completely settled.  But then I reread the 8K, and found that it says...
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On July 19, 2013, in order to avoid the costs, risks and uncertainties inherent in litigation and without admitting any liability or wrongdoing, PMI agreed to enter into a Stipulation and Agreement of Compromise, Settlement, and Release (the “Settlement”)

Ok, so I take that to mean a handshake but not a signature, or perhaps signatures on a letter of intent, but not on an agreement.

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subject to Court approval, PMI agreed to pay settlement consideration in the total amount of $10 million

Ok, so that clearly says the judge hasnt signed off yet.

The lawyers have added the appropriate weasel words.  To avoid the Kissinger-type embarrassment, I would have thought theyd wait until they could announce a firm deal.  Perhaps the fact that prosper is constantly issuing securities, and therefore needs disclosures to be more up-to-date than typical, drove their decision.
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