The Prosper "Quiet" Diary - millstones and milestones

[Investar]

Prosper Under Maintenance

In an effort to better serve you, we are currently working on system updates and configuration changes to our site. We appreciate your patience during this time, and encourage you to return when these changes are complete.
We expect the site to be down Sunday (7/12/2009) and Monday (7/13/2009).
While the site is under maintenance, none of your information will be lost or forgotten. Thank you for your patience.

Regards,
Prosper

Here's why....
Prosper Ends Quiet Period
Rolls Out Securitized Loan Funding and Trading In States Who Have Granted Approval

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Notice of Effectiveness

                        Effectiveness Date: July 10, 2009 3:30 P.M.
                        Form: S-1
                        CIK: 0001416265
                        Company Name: PROSPER MARKETPLACE INC
                        File Number: 333-147019

Prosper's Permanent File of All (public) Documents at the SEC, past, present, and in the future.

"EFFECT" is the key document lenders have been looking for. It is the SEC's way of saying, "yup, go ahead." File No. 333-147019 made "effective" is the S-1/A dated July 9, 2009. The rest of the "[Amended]General form for registration..." are essentially void although Exhibits included with some of them (and not attached to the approved filing) are considered part of, and relevant to, the July 9th set of paperwork.

[go4reward]

Prosper Under Maintenance

In an effort to better serve you, we are currently working on system updates and configuration changes to our site. We appreciate your patience during this time, and encourage you to return when these changes are complete.
We expect the site to be down Sunday (7/12/2009) and Monday (7/13/2009).
While the site is under maintenance, none of your information will be lost or forgotten. Thank you for your patience.

Regards,
Prosper

Sounds like a good sign. Let's hope it will come back soon for all of us.

Here's why....
Prosper Ends Quiet Period
Rolls Out Securitized Loan Funding and Trading In States Who Have Granted Approval

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Notice of Effectiveness

                        Effectiveness Date: July 10, 2009 3:30 P.M.
                        Form: S-1
                        CIK: 0001416265
                        Company Name: PROSPER MARKETPLACE INC
                        File Number: 333-147019

Prosper's Permanent File of All (public) Documents at the SEC, past, present, and in the future.

[Investar]

THE PROSPER "QUIET" PERIOD HAS ENDED

Late Monday afternoon, July 13, 2009, Prosper rushed an email invitation to borrowers' "Do you need another loan? Apply now!" About midnight Monday Prosper emailed lenders in 14 states to say the doors to Prosper, The Loans Marketplace have reopened. Prosper's CEO, Chris Larsen officially announced Prosper Is Back! on the Prosper blog. Bidding and funding consumer loans began in states where 'Blue Sky' approval had been granted. Early Wednesday morning a dozen borrowers from the 46 states allowed to do so, had already posted a listing. Current status of Prosper's operation in each of the 50 states is being tracked on our Prosper 50 State Progress thread.

What's the new Prosper look like? Much the same but different. It has a whole new transmission underneath but the 'gear shift lever' you operate it with is pretty familiar, improved according to early reports. There are two levers now, a 'primary' and a 'secondary'. Your primary 'shift lever' is still bidding and funding borrower listings but it includes new credit rating tools and enhanced credit data. What we called "loans" are called notes. What lenders called "bid" is called "invest" but the procedure is the same. In addition you can sell your loan notes to other lenders and/or buy theirs if they are selling, your secondary 'shift lever'. Note trading occurs on a separate web-site supervised by FOLIOfn.

It remains unclear what will happen to the loans you bought prior to shutdown, October 15, 2008. So far, no regulatory body has claimed it is illegal to own them, only that Prosper sold them illegally. The class action lawsuit may eventually affect their status. The old loans will play no role on the "new" Prosper (they will not be tradable). Loans issued April 28, 2009 to May 8, 2009 were by Prosper California (not the 'main' Prosper) and are subject to a unique status all their own.

[go4reward]

Looks like LENDING is back on Prosper today. But unfortunately, Maryland is still out.
Here is the quote from Prosper:

Not available in Maryland
Unfortunately, at this time lenders in Maryland are not able to bid or transfer money to Prosper. If you have portfolio plans, they have been paused. You may transfer money out of your Prosper account as they become available from loan payments.

[NewHorizon]

At prospers.org, this was posted today:

Here's what it says at the bottom of the page where you sign up as a lender:

"Prosper is only available to lenders from California, Colorado, Delaware, Georgia, Illinois, Minnesota, Montana, Nevada, New York, South Carolina, South Dakota, Utah, Wisconsin and Wyoming."

[deskguy]

 i sent prosper an email today pointing out that its major competitor,  lendingclub.com, remains stuck doing business in just 25 states since emerging from its quiet period last october with no sign it is trying to expand its legitimacy.

 i asked prosper what it was doing to get licensed in the 36 remaining states,  if it was actively pursuing licensure in maryland, which agency would decide its case and what its lenders could do to promote the cause. i also said i would not look kindly on a boilerplate response.

 we'll see. i'm not an optimist.

 deskguy

[foofiter]

I have a green light on prosper now and the listings look sparse. I have some money waiting to reinvest so I will start up bidding again once I see something I like.

The process to get able to bid again was agreeing to agreements. I also opened an account with folio to trade notes. I am very interested to see the secondary market on them.

I will keep post with my progress.

Foo

[deskguy]

 i posted yesterday that i had queried prosper as to its plans to get licensed in all 50 states, but with particular emphasis on maryland, my maryland. i received the following response today, which is not terribly helpful, but ....
----------------

The current states eligible for participation by Prosper lenders can be found at: http://www.prosper.com/help/investing.aspx#states.
 
The remaining states require that we complete a securities regulatory process with each of them individually. Although we are working through this process as quickly as possible, we cannot speculate on time frames for any given state. 
 
Thank you for your continued interest in Prosper. We look forward to becoming one of your investing options.
 

 
Sincerely,
Prosper Customer Support
 

[Investar]

This morning I posted a couple Diary entries to get it up to date. The "Quiet" ended in two more states since relaunch. Then Prosper.com went down for maintenance again last nite, a sign they could be "unlocking" more doors. But the routine added no states this round, we remain at 16 able to lend/trade, 46 able to borrow.

You won't hear much about the pending Class Action against the 'old' Prosper. Everything has been pushed off to late September by the court. There may be some paper-shuffeling. You might look for Prosper to file their "Answer to the 2nd Amended Complaint" by the lenders.

The other item to watch for is a pending infusion of corporate working capital. Their  March '09 financials showed they had a scant $10 million left — burned thru $30 million of the $40 million of venture capital already borrowed.

[NewHorizon]

Everything has been pushed off to late September by the court.

Moved up a bit, fwiw.  Now set for 9/15.

[Investar]

Everything has been pushed off to late September by the court.

Moved up a bit, fwiw.  Now set for 9/15.

Thanks! They were originally scheduled 9/16 so maybe the court's "mandatory furlough" isn't gonna happen now that California passed their budget.

[NewHorizon]

Everything has been pushed off to late September by the court.

Moved up a bit, fwiw.  Now set for 9/15.

Thanks! They were originally scheduled 9/16 so maybe the court's "mandatory furlough" isn't gonna happen now that California passed their budget.

I thought it was originally scheduled for 9/21.
But whatever.... 

[Investar]

I thought it was originally scheduled for 9/21.
But whatever.... 

Well, it was the 16th then the court exerted "loud political activism" by making a big ta-doo about having to move to the 21st. California had no budget and warning! warning! the court would have to grind to a halt, see. They even forced the guys and gals down in basement #3 to waste their time scanning-in thousands of copies of the document — one to each affected case. Calendar dates are never scanned. Hafta figure the newest date of the 15th was triggered when the crisis passed. No scan in of that proclamation, I noticed.
 

[Investar]

State Sanctions Under NASAA Settlement
Who's Lining Up For Their Share Of The Payout?

Thanks to posts on Pro$pers.org (and my own legwork), I put together a table of what we know so far. Prosper has settled about 10% of the potential $1 million involved to put the matter behind them. Prosper and the North American Securities Administrators Association (NASAA) finalized a template for the process on April 21st.

It is expected at least 20 states will use the NASAA sanction to 'cure' their 'hurts' (Prosper's trafficking in unregistered securities in their state prior to October 15, 2008). But one has to wonder if some will postpone, pending outcome of the class action sought by disenfranchised lenders. States are not required to participate in the NASAA sanction. They can seek other remedy on their own if they choose. If the lenders are successful that case would provide nice 'discovery' and 'exhibit' for state-level litigation. If the lenders fail, the states can fall back on the NASAA protocol, which is open ended.

UPDATE Not listed on the chart, Maine also completed its sanction (received $1,517). Maine has certified the 'new' Prosper. Since this post Missouri also certified the 'new' Prosper.

[NewHorizon]

Prosper has a new General Counsel: http://www.prosper.com/about/management_team.aspx

I wonder how this'll affect the lawsuit, if at all.