Colin Henderson
Sale of a security that has not been registered under Section 5 of the Securities Act of 1933 gives rise to a private right of action under Section 12(a)1 of that Act. The remedy that can be enforced with this private right of action is recission of the sale of the unregistered security. In practical terms this means that investors in unregistered Prosper notes that were ultimately uncollectible can get their money back. The Prosper site states that approximately $178,000,000 in loans have been funded, and although the portion of that amount that is uncollectible is not disclosed, there does seem to be disaffection in the Prosper community with Prosper's collection performance. See p2pla.org/docs/4187_001.pdf for a demand letter from the attorney for a group of Prosper investor lenders.
prosper recission desist
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