Yeah, in hindsight, there were lot of little yellow (if not red) flags with DLI. I was surprised with the consistency of monthly returns too. I think once when debt markets were doing really bad and most debt funds were reporting much lower returns except DLI, it made me go "huh...really". But I didn't think of it much further. I had no interest in DLI as I tend to not get involved financially/with money, with people who come across slick and with the gift of gab.
I've believed for a long time that DLI was failing to "mark" loans (that is show them at less value when payments were late, etc). I believed this just because I looked at his monthly reports (which he would email to anyone who asked) and knew a tiny bit about some of the things he invested in. The numbers were too good to be true. Of course I never had the data to prove anything. I'm so glad the regulators who have the power to examine the details have finally jumped in.
I think as an investor bigger issue is as investor how do you spot and avoid such situations. The past audit failures and reduced transparency with p2p lending is a major reasons for decline in investor interest in my opinion.
Wowzer! If the SEC investigation proves all that this is pretty bad and ridiculous for audit/transparency of DLI.
