Comments on: What Happens if Lending Club Goes Out of Business? http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/ personal finance tips, tricks, and commentary Mon, 13 Feb 2012 18:22:18 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Prosper Star http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-138806 Prosper Star Tue, 19 Jan 2010 05:42:51 +0000 http://www.fivecentnickel.com/?p=3711#comment-138806 Interesting piece on Prosper Loans Marketplace. http://www.thebigmoney.com/articles/money-trail/2010/01/18/you-are-unlikely-prosper Interesting piece on Prosper Loans Marketplace.
http://www.thebigmoney.com/art.....ly-prosper

]]> By: Prosper Lender http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137558 Prosper Lender Tue, 29 Dec 2009 19:31:53 +0000 http://www.fivecentnickel.com/?p=3711#comment-137558 Prosper is in the process of settling with states individually and paying fines. This link (among others) were provided in response to your December 18 comment that, as a long-time lender, you were unaware of Prosper having to deal with any legal problems. Havvy new year, everyone. Prosper is in the process of settling with states individually and paying fines.

This link (among others) were provided in response to your December 18 comment that, as a long-time lender, you were unaware of Prosper having to deal with any legal problems.

Havvy new year, everyone.

]]> By: Evan http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137556 Evan Tue, 29 Dec 2009 18:48:01 +0000 http://www.fivecentnickel.com/?p=3711#comment-137556 Just throwing it out there: That link is dated May of 2009 and Prosper members are allowed to invest/borrow in Montana (http://www.prosper.com/help/investing.aspx#gettingStarted) So I guess everything was cleared up? Just throwing it out there:

That link is dated May of 2009 and Prosper members are allowed to invest/borrow in Montana (http://www.prosper.com/help/in.....ingStarted)

So I guess everything was cleared up?

]]> By: Prosper Lender http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137554 Prosper Lender Tue, 29 Dec 2009 18:44:39 +0000 http://www.fivecentnickel.com/?p=3711#comment-137554 http://www.sao.mt.gov/news/20090519Prosper.html Montana State Auditor's Office Statement: State Auditor and Commissioner of Securities and Insurance Monica Lindeen today sanctioned a San Francisco company whose unregistered securities schemes defrauded nearly $400,000 from Montana investors. Lindeen’s office signed a final Consent Agreement and Order with Prosper Marketplace, Inc., a San Francisco-based online “peer-to peer” lending service, to resolve matters relating to unregistered securities and securities fraud. “My message is clear,” Lindeen said. “If you prey on Montana investors with unregistered securities schemes, or seek to profit from duping unsuspecting Montanans we will find you and we will punish you.” [...] "Several states had been investigating Prosper’s activity last year and were considering or preparing enforcement actions." http://www.sao.mt.gov/news/20090519Prosper.html

Montana State Auditor’s Office Statement:

State Auditor and Commissioner of Securities and Insurance Monica Lindeen today sanctioned a San Francisco company whose unregistered securities schemes defrauded nearly $400,000 from Montana investors.

Lindeen’s office signed a final Consent Agreement and Order with Prosper Marketplace, Inc., a San Francisco-based online “peer-to peer” lending service, to resolve matters relating to unregistered securities and securities fraud.

“My message is clear,” Lindeen said. “If you prey on Montana investors with unregistered securities schemes, or seek to profit from duping unsuspecting Montanans we will find you and we will punish you.”
[...]
“Several states had been investigating Prosper’s activity last year and were considering or preparing enforcement actions.”

]]> By: Prosper Lender http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137550 Prosper Lender Tue, 29 Dec 2009 18:29:30 +0000 http://www.fivecentnickel.com/?p=3711#comment-137550 Evan - there's also some information available regarding the class action suit here: http://prosperclassaction.wordpress.com/ Evan – there’s also some information available regarding the class action suit here:

http://prosperclassaction.wordpress.com/

]]> By: Evan http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137406 Evan Sun, 27 Dec 2009 06:48:12 +0000 http://www.fivecentnickel.com/?p=3711#comment-137406 The blind rage came from the tone I perceived if I perceived incorrectly, I apologize. Aagain, I still feel that you genuily hate the company. As far as the legal 'stuff' - are they currently in trouble with the SEC? The class action - I found Case CGC-08-482329, is this what you were referring to? From what I can tell from the Court Docs it is currently in mediation. Do you have any information?> From a quick review of the form, I really believe that Prospers.org just seems like a bitchfest. It seems Odd that LendingClub would enter into an agreement that FCN highlights in the FAQ, but prosper hasn't? The blind rage came from the tone I perceived if I perceived incorrectly, I apologize. Aagain, I still feel that you genuily hate the company.

As far as the legal ’stuff’ – are they currently in trouble with the SEC? The class action – I found Case CGC-08-482329, is this what you were referring to?
From what I can tell from the Court Docs it is currently in mediation. Do you have any information?>

From a quick review of the form, I really believe that Prospers.org just seems like a bitchfest.

It seems Odd that LendingClub would enter into an agreement that FCN highlights in the FAQ, but prosper hasn’t?

]]> By: Prosper Lender http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137402 Prosper Lender Sun, 27 Dec 2009 04:09:36 +0000 http://www.fivecentnickel.com/?p=3711#comment-137402 Evan - I am quoting my entire post - and I'd like you to point out where you think you are seeing "blind rage?" "Evan – Prosper now actually owns the loans (read their S-1 filing). The “lenders” are unsecured creditors of Prosper’s debt. As for Legal trouble, I’d say that being shut down by the SEC for selling unregistered securities does indeed constitute “legal trouble.” Of course, Prosper now finds itself in the middle of a related class action lawsuit. Again, legal trouble." I have merely pointed out that the Prosper platform has fundamentally changed since the re-lauch, which has added another layer of risk to the lenders related to the notes. Information regarding the class action suit is available from the we site of the Superior Court of California - County of San Francisco. I would assume that the Court would constitute an acceptable source - even for you. Prospers.org is hardly a hate-group. It is the largest and most active site for Prosper participants available anywhere online. Evan – I am quoting my entire post – and I’d like you to point out where you think you are seeing “blind rage?”

“Evan – Prosper now actually owns the loans (read their S-1 filing). The “lenders” are unsecured creditors of Prosper’s debt. As for Legal trouble, I’d say that being shut down by the SEC for selling unregistered securities does indeed constitute “legal trouble.” Of course, Prosper now finds itself in the middle of a related class action lawsuit. Again, legal trouble.”

I have merely pointed out that the Prosper platform has fundamentally changed since the re-lauch, which has added another layer of risk to the lenders related to the notes.

Information regarding the class action suit is available from the we site of the Superior Court of California – County of San Francisco. I would assume that the Court would constitute an acceptable source – even for you.

Prospers.org is hardly a hate-group. It is the largest and most active site for Prosper participants available anywhere online.

]]> By: Evan http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137278 Evan Tue, 22 Dec 2009 14:45:57 +0000 http://www.fivecentnickel.com/?p=3711#comment-137278 From your Forums it seems that RosenLegal was the firm who took it on? Is that right? If so, is there a reason it isn't on their website? Did it get moved to another firm? From your Forums it seems that RosenLegal was the firm who took it on? Is that right?

If so, is there a reason it isn’t on their website? Did it get moved to another firm?

]]> By: Evan http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137274 Evan Tue, 22 Dec 2009 14:35:21 +0000 http://www.fivecentnickel.com/?p=3711#comment-137274 I don't think I love prosper as much as you clearly hate it (even linking to a bitch-fest forum about the subject of hating Prosper lol), but I think I should respond. "I’d say that being shut down by the SEC for selling unregistered securities does indeed constitute “legal trouble.” They were served with a C&D letter just like Lending Club was in the April before over the definition of a what a security is. Regardless, Prosper has since resumed lending in most states, so I think they cleared that trouble up. As for the class action I can't find anything legit on it, and would appreciate any links, as would any reader of this blog (please don't post garbage hearsay from your forum or weird blog). I am not IN LOVE with Prosper, nor do I even have an affiliate relationship with them, I just think you REALLY hate them and I always find blind rage amusing. I don’t think I love prosper as much as you clearly hate it (even linking to a bitch-fest forum about the subject of hating Prosper lol), but I think I should respond.

“I’d say that being shut down by the SEC for selling unregistered securities does indeed constitute “legal trouble.”

They were served with a C&D letter just like Lending Club was in the April before over the definition of a what a security is. Regardless, Prosper has since resumed lending in most states, so I think they cleared that trouble up.

As for the class action I can’t find anything legit on it, and would appreciate any links, as would any reader of this blog (please don’t post garbage hearsay from your forum or weird blog).

I am not IN LOVE with Prosper, nor do I even have an affiliate relationship with them, I just think you REALLY hate them and I always find blind rage amusing.

]]> By: Prosper Lender http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137256 Prosper Lender Tue, 22 Dec 2009 06:50:51 +0000 http://www.fivecentnickel.com/?p=3711#comment-137256 Evan - Prosper now actually owns the loans (read their S-1 filing). The "lenders" are unsecured creditors of Prosper's debt. As for Legal trouble, I'd say that being shut down by the SEC for selling unregistered securities does indeed constitute "legal trouble." Of course, Prosper now finds itself in the middle of a related class action lawsuit. Again, legal trouble. Evan – Prosper now actually owns the loans (read their S-1 filing). The “lenders” are unsecured creditors of Prosper’s debt. As for Legal trouble, I’d say that being shut down by the SEC for selling unregistered securities does indeed constitute “legal trouble.” Of course, Prosper now finds itself in the middle of a related class action lawsuit. Again, legal trouble.

]]> By: Evan http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137200 Evan Sun, 20 Dec 2009 22:19:18 +0000 http://www.fivecentnickel.com/?p=3711#comment-137200 John, They don't seem to be making the risky loans (we=lenders) are...they just take their piece of each loan through fees John,

They don’t seem to be making the risky loans (we=lenders) are…they just take their piece of each loan through fees

]]> By: John DeFlumeri Jr http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137190 John DeFlumeri Jr Sat, 19 Dec 2009 13:41:13 +0000 http://www.fivecentnickel.com/?p=3711#comment-137190 I wouldn't be surpised if they do go out of business. Risky loans go bad. John DeFlumeri Jr I wouldn’t be surpised if they do go out of business. Risky loans go bad.

John DeFlumeri Jr

]]> By: Wojciech Kulicki http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137179 Wojciech Kulicki Fri, 18 Dec 2009 18:53:59 +0000 http://www.fivecentnickel.com/?p=3711#comment-137179 @Evan - That was what I was referring to. I didn't remember the details of what they were shut down for. I just knew I couldn't really use the service for almost a year, which (while I understand the reason they did it) kind of made me forget about the site and move on... @Evan – That was what I was referring to. I didn’t remember the details of what they were shut down for. I just knew I couldn’t really use the service for almost a year, which (while I understand the reason they did it) kind of made me forget about the site and move on…

]]> By: Evan http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137177 Evan Fri, 18 Dec 2009 17:09:56 +0000 http://www.fivecentnickel.com/?p=3711#comment-137177 "unfortunately [prosper] experienced some legal trouble and had to re-structure" Do you have a link? I have been a member of prosper since 2007 and don't remember any legal trouble. They did shut down for a good amount of months (just as lendingclub did) as to register with the SEC so they could create a secondary market for notes “unfortunately [prosper] experienced some legal trouble and had to re-structure”

Do you have a link? I have been a member of prosper since 2007 and don’t remember any legal trouble. They did shut down for a good amount of months (just as lendingclub did) as to register with the SEC so they could create a secondary market for notes

]]> By: Money Funk http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137176 Money Funk Fri, 18 Dec 2009 16:53:52 +0000 http://www.fivecentnickel.com/?p=3711#comment-137176 I just listed with LC. Talked to Rob yesterday who 'walked' me through the whole program. You can see all the current posting about LC on my blog. I love LC. I was skeptical about its longevity, but I have no doubt it will last and prosper. Plus, if anything did happen they are backed by a bank or service to cover it. Great, great person. I should be their new spokesperson, cuz I did a whole homemade audio endorsement on it yesterday. ;) I just listed with LC. Talked to Rob yesterday who ‘walked’ me through the whole program. You can see all the current posting about LC on my blog. I love LC. I was skeptical about its longevity, but I have no doubt it will last and prosper. Plus, if anything did happen they are backed by a bank or service to cover it. Great, great person. I should be their new spokesperson, cuz I did a whole homemade audio endorsement on it yesterday. ;)

]]> By: miguel http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137174 miguel Fri, 18 Dec 2009 16:45:42 +0000 http://www.fivecentnickel.com/?p=3711#comment-137174 It is good to see that LC is thinking long term. This allows me to consider P2P lending as a more secure option as an alternative asset class within my overall portfolio. In my case, I have about a 38 yr time horizon before retirement and I'm two years in. What would you consider an appropriate asset class % for Lending Club? For me specifically, I am an aggressive-moderate when it comes to risk. I would love to see a post on your thoughts on this as well. Thanks! It is good to see that LC is thinking long term. This allows me to consider P2P lending as a more secure option as an alternative asset class within my overall portfolio. In my case, I have about a 38 yr time horizon before retirement and I’m two years in. What would you consider an appropriate asset class % for Lending Club? For me specifically, I am an aggressive-moderate when it comes to risk. I would love to see a post on your thoughts on this as well.

Thanks!

]]> By: Steph http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137166 Steph Fri, 18 Dec 2009 14:06:53 +0000 http://www.fivecentnickel.com/?p=3711#comment-137166 "In other words, if Lending Club runs into trouble, there are plans in place for a backup servicer to step in and take over the loan servicing." This is good news, thanks for posting this! “In other words, if Lending Club runs into trouble, there are plans in place for a backup servicer to step in and take over the loan servicing.”

This is good news, thanks for posting this!

]]> By: Wojciech Kulicki http://www.fivecentnickel.com/2009/12/18/what-happens-if-lending-club-goes-out-of-business/comment-page-1/#comment-137165 Wojciech Kulicki Fri, 18 Dec 2009 12:39:27 +0000 http://www.fivecentnickel.com/?p=3711#comment-137165 Great reader question--I have been interested in Lending Club for a while now, but I definitely didn't consider it from that angle. We experimented with Prosper, which was another peer-to-peer network, but unfortunately it experienced some legal trouble and had to re-structure, and we also lost out on a few loans. Left a bit of a sour taste in my mouth, but we'll probably look at LC pretty soon. Great reader question–I have been interested in Lending Club for a while now, but I definitely didn’t consider it from that angle.

We experimented with Prosper, which was another peer-to-peer network, but unfortunately it experienced some legal trouble and had to re-structure, and we also lost out on a few loans. Left a bit of a sour taste in my mouth, but we’ll probably look at LC pretty soon.

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