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The SEC shut down Lending Club in March, then Prosper, and finally Loanio this week....Regulators have concluded that loans created in these networks are in fact securities and must be registered as such.

The article makes a good point about the SEC and the current financial crisis:

I find it a bit ironic that a $100-million self-regulating and relatively transparent marketplace receives heavy-handed treatment while multi-trillion dollar financial products grew relatively unchecked in recent years

 

Submitted: Nov 26, 2008    Views: 253    Comments: 4    Likes: 1   


View Article: http://www.netbanker.com/2008/11/sec_shuts_loanio_down.html


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Comments Received:

Lender
(Unregistered)

A lawsuit was filed against Prosper this evening in California Superior Court.

Discussion is taking place at prospers.org

Posted: Nov 27, 2008

Sam Cass
Sam_Cass

I have pretty mixed feelings about this also. I think it's good to get this straightened out before the market grows, so I do think the SEC's decision is a good one. At the same time I have to agree that there seem to be bigger fish to fry.

On a related note, I have heard the default rates on Prosper were extremely high, even for their more highly rates loans. Anyone with additional insight on this?

Posted: Nov 27, 2008

tightwad

About a year and a half ago, I thought seriously about dipping in to the lending side of Prosper. Something didn't feel right and I chickened out. Glad I did now.

Wonder what is going on with the outstanding loans?

Posted: Nov 27, 2008

PowerMasses
(Unregistered)

Ha!

After reading so much hype in the financial blogs about p2p lending a year ago, I decided not to try Prosper... too volatile, unproven and unregulated.

I did play with Lending Club, and I'm glad I did pick that site instead. Their product is now approved by the SEC. I'll wait another couple of months, but the way it is looking, I'll be investing more... few defaults, good borrowers, good returns

Posted: Dec 10, 2008



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