Well... As I predicted in my last writeup, the SEC has found Prosper.com to be in violation of the securities act of 1933. The SEC made this finding public yesterday.
The SEC's public statement can be found here:
SEC Prosper Cease & Desist Order
This SEC release explains why prosper.com has ceased operation.
From the SEC Order. . .
The loan notes issued by Prosper pursuant to this platform are securities and Prosper, from approximately January 2006 through October 14, 2008, violated Sections 5(a) and (c) of the Securities Act, which prohibit the offer or sale of securities without an effective registration statement or a valid exemption from registration.
The details are a fun read, and cover much of the territory that has been discussed here in the past.
Tuesday, November 25, 2008
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Here's a gem from the document that it would have been nice for the company to recognize on their own:
ReplyDelete"Lenders rely on the efforts of Prosper because Prosper’s efforts are instrumental to realizing a return on the lenders’ investments. Prosper lenders are effectively passive with respect to elements important to realizing profit on their investments and Prosper is instrumental in each of these elements."