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Messages - Xenon481

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Investors - P / Re: Does AQI ever "screw up" ???
« on: January 29, 2013, 03:43:13 PM »
If two people here have had this issue where Prosper misapplied the AQIs, then that indicates that the problem is much more wide-spread and there are potentially thousands of Borrower Dependent Notes that were generated as parts of misfired AQIs.

Prosper not only should have notified lenders of the fact that it was aware of misfired AQIs, it also should have proactively searched for all instances of misfired AQIs and refunded ALL lenders, not just the one(s) that noticed and complained.

It appears however, that Prosper has not done so.

Investors - P / Re: Class action lawsuit
« on: January 26, 2013, 05:52:46 PM »
Here are some updated facts in the Class Action Lawsuit against Prosper:

- Prosper filed a "Motion For Summary Judgement" with the court, requesting that the case be immediately ruled in Prosper's favor without going to trial.

- The judge ruled to deny Prosper's motion, stating that Prosper's arguments for summary judgement in their favor were not valid for a number of reasons including the following:

[...] I have inferred from other undisputed facts that in the event of Prosper's failure there would be no effective means to recoup the loan proceeds.

The complete court docket and documents can be found here:

Investors - P / Re: How does a note go from current to 31+ days late?
« on: January 26, 2013, 05:40:17 PM »
I had a note go late, but instead of showing up in "Past due (1-30 days)" it was immediately listed as "Past due (31+ days)." How is it possible it skipped being late 1-30 days?

This often happens when a payment is successfully pulled from the borrower's account, but then the borrower disputes the validity of the payment with their bank (and has the bank pull the payment back from Prosper.

The dispute is fraudulent, yet often times, Prosper is never able to recover any further payments from a borrower that takes these actions.

Investors - P / Re: Waiting for statements...
« on: January 26, 2013, 05:35:56 PM »
These have been questions since the dawn of Prosper. First they didn't have the ability to generate statements at all. Then they started creating statements but at seemingly random times from days to weeks to months late. And as far as I have seen, nothing has changed since...

Investors - P / Re: Class action lawsuit
« on: June 09, 2012, 10:26:32 PM »
I don't want this to descend into an anti-Prosper tirade that is commonplace on I try and look at it objectively. And while I respect the views of ira01 and Xenon481 plus many others with similar views on they cannot be considered objective.

They have their opinion and I have mine.


I was very careful in my post not state any opinions. Everything that I said was pure fact as can be ascertained from the court website and Prosper's own statements in filings with the SEC.

The facts that I posted are purely objective because they are facts.

It is a fact that if Prosper loses this case, the liability that the class seeks is on the order of approximately $46million which Prosper's own filings with the SEC show that they do not have available to them. In fact, a liability of that size is more than half of all of the money given to Prosper by the VC firms in total in the almost 7 years of Prosper's existence.

This fact is in direct contradiction to your opinion:

In the unlikely event it will succeed I really don't think it will have much material impact on Prosper.

Prosper stopped performing debt sales after December 2007 in direct violation of their legal agreements with lenders.

Investors - P / Re: Class action lawsuit
« on: June 07, 2012, 09:27:31 PM »
The Class Action lawsuit against Prosper applies to all repackaged loans sold by Prosper to individual "Lenders" (loan purchasers) before the SEC (Federal Government) shut down Prosper's original platform in 2008 for illegally selling unregistered securities.

All decisions by the Court thus far have been in favor of the claimants and against Prosper. All indications point towards there being a very good possibility that the court will decide against Prosper when all is said and done.

If the Class Action lawsuit succeeds against Prosper, the likely result will be that all Lenders from Prosper's original platform will be given the opportunity to force Prosper to repurchase any and all delinquent loans during that time period. This is a total amount of approximately $46million according to Prosper's own figures.

That is $46million that Prosper does not have. Such a ruling would likely bankrupt Prosper.

As can be seen in Prosper's quarterly SEC regulatory filings:

Prosper only had approximately $15million in venture capital money available to it as of the end of March, 2012 and were losing $1.6million of that every single month.

Prosper has already spent over $2million (and possibly close to $3million) in legal costs trying to defend against the class action lawsuit and have not had a single decision in their favor.

Also, a Prosper bankruptcy isn't the only possible downside to "Lenders" on Prosper's current SEC Registered platform. Prosper's current "Lenders" are lending money to Prosper, not to Prosper's Borrowers. Prosper's "Lenders" are unsecured creditors of Prosper and have no direct relationship with the actual loans to borrowers themselves. The actual loans to the borrowers are assets held solely by Prosper themselves. As such, it is possible (would have to be determined by the courts) and possibly likely that all assets of Prosper (potentially including these loans) would be liquidated as part of a bankruptcy proceeding in order to pay the $46million in restitution to the Class Action lawsuit.

This could potentially cause all of Prosper's current "Lenders" to lose all money that they currently have invested with Prosper.

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