I was expecting Prosper’s Quiet Period to go similar to Lending Club’s — Quiet for a few months and then come back out better than ever. Therefore, I am amazed at what I just read…

Prosper Receives a Cease and Desist Order from the SEC

Considering that Prosper was already in a quiet period and no longer talking bids on loans, this seems like an unnecessary step by the SEC, but they may have felt it was necessary to make a point. I also wonder if they had not received complaints because of their misleading marketing — including quotes in the media on horribly misleading default statistics. Or maybe it was their complete failure in collections as Prosper continued to focus on origination and not on operations.

I have transferred out all the money in my account possible and am glad that I stopped lending with Prosper some time ago.

Quotes from the Cease and Desist Letter
There were some interesting points to the cease and desist letter that I would like to highlight (any emphasis added is mine).
Read the rest of this entry »

Prosper announced that they are entering a quiet period and will not be accepting new commitments from lenders. This follows on Lending Club’s announcement yesterday that it is coming out of their quiet period. It seems Prosper is interested in having the same form of loans that can be resold which Lending Club announced yesterday.

Update: Prosper Received a Cease and Desist Order from the SEC.

Overall, both announcements are likely to be a good thing for the P2P lending marketplace. Although, with the current credit crunch and market downturn, Prosper’s timing is not ideal. Many people will be seeking alternative forms of credit and investments over the coming months.

Prosper mentions that they will work to ensure that borrowers can still receive funding so that the platform does not completely dry up during the registration process, but it looks like that funding is not secure yet.

Didn’t a Prosper manager boast around the time of the Lending Club quiet period announcement that the registration could be done without a quiet period if it was done correctly?

The note from Prosper Marketplace about the quiet period: Read the rest of this entry »

Lending Club just sent an update via email about their latest filing with the SEC. Unfortunately, they are still in a quiet period so they do not say much about the ongoing outlook, but it seems they may be one step closer to completing the requirements to return to P2P lending. So maybe Lending Club will survive.

The filing was posted to the SEC website at 5:30 PM eastern time toiday (Friday June 20th) and I am writing this less than an hour later.

Link to the Lending Club filings documents. I have not had the chance to read through the whole filing yet but I did Read the rest of this entry »