Print

[moneytree4172]

OK, so my account was tied to WAMU which is no longer in existence... so then I'd probably have to sign the new lender agreement to add a new bank account.

I think I'd rather let them keep the $.47

My account was tied to Bank Atlantic which is no longer in existence. I want my $.47.

You can update your bank info with Prosper.  There was a process on their site.  I didn't see anything about a new lender agreement and Prosper would never change the agreement I signed up for in a sneaky or underhanded way.    

I had to update my info with them when I had an unexpected recovery last year.  My old bank was bought out by my new bank, so I went through the hassle then.  I also built a new house, changed ISPs and dropped my land line in favor of cell only.  Forwarded mail (now expired) is the only reason I knew to check my account.  (end of year tax crap)

[ira01]

The question I would ask is how bad of a deal should be opted out on as a show of dissatisfaction with the negotiated settlement?

It would have to be mighty bad (or you would have to be getting very little), because anyone who opts out doesn't get anything under the settlement.  Are you really planning on filing your own securities suit against Prosper? 

[Beerbud1]

I took this line out of prosper's SEC filing for those Genius's that THINK you can bring a separate suit :

In exchange for a full release of the Claims as to all class members against all defendants, and subject to Court approval, PMI agreed to pay settlement consideration in the total amount of $10 million according to the following schedule:

[ira01]

I took this line out of prosper's SEC filing for those Genius's that THINK you can bring a separate suit :

In exchange for a full release of the Claims as to all class members against all defendants, and subject to Court approval, PMI agreed to pay settlement consideration in the total amount of $10 million according to the following schedule:

The only (non)genius here is you.  Class members who opt out are no longer class members, and are not bound by the settlement.  That is what it means to opt out. 

If the lawsuit is one to obtain a money judgment from the defendant, you will receive notice of the proceedings and be given the chance to opt out of them. By opting out, you will not be bound by the result in the case. Of course you will not be able to share in any recovery from the defendant the case produces. You will however be allowed to sue the defendant individually on your claim.

http://class-actions.lawyers.com/Class-Action-FAQ.html

[NewHorizon]

I think the settlement should be based on harm suffered.  People like MuleShoes who made a lot of bad loans have an argument that had proper disclosures been made, they would not have lost all they did.  One element of recovery in litigation is damage.  The mere illegal selling of securities, without damage, would not entitle the class to recovery.  That would lead to an SEC fine or other penalty.

Settlement based on damage would seem reasonable.  But I'm not seeing the foundation upon which one would successfully argue that the losses would have been less had the loans been properly registered as securities. 

I mean you wouldn't be able to say something like, "I lost $500, and I should get $400 back, please, because if the loans were registered securities, I would have only lost $100" and expect anybody to just accept it as true.

There's just nothing out there that *I* know of which proves that by not registering the loans, loan performances suffered and by how much.

[ira01]

I think the settlement should be based on harm suffered.  People like MuleShoes who made a lot of bad loans have an argument that had proper disclosures been made, they would not have lost all they did.  One element of recovery in litigation is damage.  The mere illegal selling of securities, without damage, would not entitle the class to recovery.  That would lead to an SEC fine or other penalty.

Settlement based on damage would seem reasonable.  But I'm not seeing the foundation upon which one would successfully argue that the losses would have been less had the loans been properly registered as securities. 

I mean you wouldn't be able to say something like, "I lost $500, and I should get $400 back, please, because if the loans were registered securities, I would have only lost $100" and expect anybody to just accept it as true.

There's just nothing out there that *I* know of which proves that by not registering the loans, loan performances suffered and by how much.

I think the very premise of registration is that additional (and better) disclosures are required, such as the issuance of a Prospectus governed by a variety of rules to make it non-misleading (unlike the public statements that Prosper actually made, which as amply demonstrated here, were largely completely bogus).  I think that if Prosper had issued proper Prospectuses initially, lenders would have lost a lot less money.

But regardless, I don't think that matters.  As I've noted before, I believe that the remedy for a buyer who purchased an unregistered security is rescission, which means that the buyer can force Prosper to repurchase any such loan, returning the non-performing loan to Prosper, and Prosper returning the full purchase price (plus interest) to the buyer.  Moreover, since each loan sale was a separate violation, and the transactions are voidable not void, I believe each lender can pick and choose which transactions to rescind.  Thus, buyers can keep their performing loans, and only rescind their defaulted loans. 

[Beerbud1]

^^^^^^^^
This is an Attorney? Clueless how a class action judge thinks!
He's in for a rude awakening!

[bamalucky]

Not the place for petty arguments to spill into

[ira01]

^^^^^^^^
This is an Attorney? Clueless how a class action judge thinks!
He's in for a rude awakening!

Considering that I actually litigated and settled several 8-figure and 9-figure class actions to great success, and you are a know-nothing non-lawyer whom I proved was dead wrong about the effect of opting out of a class action, I'll put my opinions up against yours anytime.   

[NewHorizon]

...and Prosper returning the full purchase price (plus interest) to the buyer. 

Well but if the settlement is for $10mil, then that's the cap (minus legal fees).  I haven't done the math, but it seems unlikely that the purchase price would ever be returned in full (much less interest too) for all rescinded loans. 

Maybe that's nit-picky.  But also...

Thus, buyers can keep their performing loans, and only rescind their defaulted loans. 

...some folks (like xraider?) might argue that even performing portfolios are "damaged" because their ROIs would have been higher had the loans been registered.

IOW, if you're going to argue that portfolios took a hit because the loans weren't registered, then you need to say that ALL portfolios - red or green - took a hit.  And once you do this, splitting that $10mil proportional to lender outlays - including to lenders with performing loans - is the only equitable approach I can think of.  If that were to happen, lenders in the red would be less red (or green) and lenders in the green would be more green - which, again, strikes me as fair.

...I'll put my opinions up against yours anytime.   

@bama: +1

[DCS]

Beerbud, from your reaction, I'm curious: How do you believe the settlement would most fairly be divided, and how do you believe it actually will be divided?

Several here have voiced an opinion on the options of amount lost, amount invested, and total number of loans. Based on the arguments I've read in this thread, I bet it will end up divided based on amount invested. You seem to have strong feelings on the matter, curious.

[msava]

OK, so my account was tied to WAMU which is no longer in existence... so then I'd probably have to sign the new lender agreement to add a new bank account.

I think I'd rather let them keep the $.47

Depends. Do you still have the account? I had a Wamu account, which has since become Chase. Same acct # and same routing #. In fact, I still have Wamu checks which work. So, theoretically, you could pull your $.47 out.

Not same account. I had to go inside the bank and get all new paperwork.

[Beerbud1]

It's not what I believe, it's what the judge will decide!

[NewHorizon]

It's not what I believe, it's what the judge will decide!

I think it's a given that how this plays out (including the scenario I posted) is speculation here at this point.
I would hope it's also a given that we all can live with that.

[mothandrust]

With stocks that have a class action suit, they mail the class members claim forms and if it is a meaningful amount, I fill it out and enclose documentation (copy of brokerage statement showing I held the security during the requisite time period) then after some months I get mailed a check.

No need to contact the company or hope that the broker I bought the stock in is still in business or that my account is still open.

Letting Prosper.Com handle the disbursements directly is like asking the fox to distribute back the eggs to the henhouse owner.