Author Topic: You may not purchase notes in an amount in excess of 10% of your net worth  (Read 11659 times)

dontvote

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You may not purchase notes in an amount in excess of 10% of your net worth
« Reply #15 on: April 05, 2013, 09:56:19 AM »
They walk among us.
dontvote

Interest Radar IRR: 46.11%
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HotCoffey

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So is the 10% limit for all p2p lending, or could someone invest 10% at Prosper and 10% at LC and still abide by "the rules"? Is there an official SEC rule somewhere that we can reference?

ee1x

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So is the 10% limit for all p2p lending, or could someone invest 10% at Prosper and 10% at LC and still abide by "the rules"? Is there an official SEC rule somewhere that we can reference?

Welcome to the forums, HotCoffey.

I have to agree with mo and berniemadeoff here, it seems to be a CYA thing and does not appear to be actively enforced. If you count my student loans, I have a negative net worth right now but I have had a significant amount of notes on both the Prosper and LC platforms for over a year. Additionally, I reside in Illinois and Prosper does not appear to have a restriction on this state.

I offer no warranty with my words and this is not legal advice but I wouldn't worry about it too much.
Investing since March 2012

Show Me The $

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In reality there is no way on earth they could even if they wanted to, enforce this. Just FYI. I have a small % of my NW in P2P in general, almost exclusively in LC


rev

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What I learned from these contracts is that they add this requirement so that, if you lose all your money in Lending Club notes and sue them because you're now homeless, they just render your whole argument void because you defaulted on that clause. "Sorry, you abused the 10% limit, no remedy for you here you transgressor, move along."
Other than waiving your right to sue them one day, I doubt that ignoring that limit has any consequences.

Booleans

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Lending Club doesn't really verify investor information, they are mainly concerned about the accuracy of information provided by borrowers. You can put as much money as you want into LC and they won't stop you.