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[Senator]

So, from a functional analytic perspective, the loans were safer before the SEC stepped in to baby us.

Are you sure this Prosper action was dictated by the SEC?  I'm not.  You got a link?

[God-Father]

Well if it wasn't the SEC, it is probably the most stupid thing Prosper has done to date. 

[Senator]

Well if it wasn't the SEC, it is probably the most stupid thing Prosper has done to their customers, the lenders, to date. 

fixed

[nonattender]

So, from a functional analytic perspective, the loans were safer before the SEC stepped in to baby us.

Are you sure this Prosper action was dictated by the SEC?  I'm not.  You got a link?

I'm not sure what you mean by "Prosper action" - the SEC made a ruling that the loans were securities,
which necessitated that Prosper alter its corporate structure so that they would not be non-compliant.

The SEC ruling of Nov. 24th, 2008:  http://www.sec.gov/litigation/admin/2008/33-8984.pdf

LendingClub received SEC approval a month earlier (and Prosper went "quiet" the next day), so, there
was probably some back and forth with the SEC, who had apparently decided that it preferred the LC
format, which gave SEC regulatory control, and which, at the same time, introduced operational risks,
since the loans/notes were now to be structured according the LC model, as obligations of p2p corps.

Shortly thereafter, the usual cut and paste class action lawyer types came out of the woodwork to "help",
thinking that they had the usual cut and paste type of lawsuit, plus handy dandy SEC ruling to base it on.

Prosper continues to spend time, money, and attention on fighting this silly ruling - and what followed it...

Let me know if I did not answer your question.

-t

[bamalucky]

NA,do you feel that Prosper advertising lender rates at 6-16% is honest?

[The_Cat]

when you guys bitch and moan about shit like this, it does nothing but undermine complaints about things that are legitimately wrong.  try to relax.

-t

But, oddly enough, deceptive marketing is more likely to result in serious consequences for Prosper than incompetence.

like catching the eye of the SEC and/or lawsuits?

The effective, functional, difference, between an SEC registered peer to peer lending company and an SEC unregistered peer to peer lending company is as follows (which alters net risk profile not one whit, and makes the entire case hinge upon proving some sort of damage, beyond mere lack of registration):

Before registration, lenders were subject to the exact same idiosyncratic risks on a per borrower basis.
"Choose to lend money to borrowers who wind up not paying you back and you lose what you lent out."

After registration, lenders were subject to the same idiosyncratic risks on a per borrower basis, except that now, due to the corporate structure necessitated by the labeling of the notes as "securities", the lenders are subject to a NEW risk, that of operational risk of the p2p lending company itself, as "notes" are now a general obligation of the company, and not a general obligation of the individual borrowers...

Pre registration:   Lenders <-> Borrowers
Lenders own debt obligations of individual borrowers.  Risk is that borrowers do not pay back the loans.

Post registration:  Lenders <-> Prosper <-> Borrowers
Lenders own debt obligations of Prosper, Prosper owns borrower debt obligations.  Same risk as before, except that now there's the added risk that, if anything happens to Prosper, there go all the "notes"...

So, from a functional analytic perspective, the loans were safer before the SEC stepped in to baby us.

All else is greed talking.

-t

I have to call BULLSHIT. The SEC is not the perfect regulatory agency but making the notes securities subjects Prosper to a somewhat higher standard with respect to ads.

Do you really believe the risk is all that different? Prosper has always held that they were the lender. That's how they could pursue collections. (Not that they did)

[Senator]

NA,do you feel that Prosper advertising lender rates at 6-16% is honest?

Perhaps they really mean a minus sign.

[tekiegreg]

Interesting schtuff here, nominate for lobby por favor?

[Mtnchick]

nonattender hasn't bid in almost 2 years. That pretty much says all I need to hear on how much faith he has in Prosper. Even Anton has bid

[ResearchPro]

I've always advocated less loans with bigger bids..These little silly $50 bids get you the AVERAGE.

Wow. Worthy to be quoted.
And someone here regarded you as a smart investor...

[God-Father]

I've always advocated less loans with bigger bids..These little silly $50 bids get you the AVERAGE.

Wow. Worthy to be quoted.
And someone here regarded you as a smart investor...

And a few big loans gets you -6.95%

[nonattender]

Interesting schtuff here, nominate for lobby por favor?

"Seconded".

-t

[nonattender]

I have to call BULLSHIT. The SEC is not the perfect regulatory agency but making the notes securities subjects Prosper to a somewhat higher standard with respect to ads.

I fail to see how "bullshit" mighy apply.  What is it, exactly, in what I said, that you think is not the truth?
Prior to the SEC stepping in, the risk profile was *exactly* the same as it is now, just without the op-risk
which *the SEC* mandated be introduced into the system, by ruling that loans were securities, so they'd
get to have regulatory control over the industry.  Interestingly, with all the shakeup, and reorganizations,
lately, it does not appear that P2P lending will continue to be under the regulatory umbrella of the SEC, in
the future, but that is still settling down and is a while off...  (progressing at the "speed of government").

Do you really believe the risk is all that different? Prosper has always held that they were the lender. That's how they could pursue collections. (Not that they did)

Uh, no - I don't believe the risk is all that different - that was kind of my major premise - if you'd read it.
 
As bama stated in another thread, there was a whole lot of lending to people who "couldn't be collected
from if you had a gun", which I find to be a very apt description of quite a lot of the behavior that I saw.

-t

[Cushie]

I've always advocated less loans with bigger bids..These little silly $50 bids get you the AVERAGE.

Wow. Worthy to be quoted.
And someone here regarded you as a smart investor...

Eh, a lot was different two plus years ago.

[ResearchPro]

Eh, a lot was different two plus years ago.

You think the portfolio theory of Markovitz was suddenly different 2+ years ago?