Prosper Settles with State SECs for $1 Million
On top of the cease and desist order issued by the federal SEC, Prosper has agreed to a $1 million fine imposed by the North American Securities Administrators Association (NASAA), which is the organization of state and provincial SECs around the United States, Canada, and Mexico.
According to the NASAA press release, “several” states had already been conducting investigations into the legality of Prosper’s operations, and earlier this year, a working group of regulators from 20 states was assembled to create a unified resolution. I suspect regulators would have been able to extract more in fines from Prosper individually, but this joint action certainly carries more gravity.
The press release includes no details on when Prosper must pay out the $1M fine, or how it will spread the fine among the 51 states (including D.C.) in which Prosper operated prior to closing down. Although publicized actions such as this one by the NASAA can make state regulators look tough in these times of lacking regulation, the paltry $20k that each state might receive seems to pale in comparison to the amount regulators’ constituents have lost over the years from truly criminal and negligent fraudsters.
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[...] with state regulators post-SEC approval, there are plenty of states also claiming their take for Prosper’s $1M settlement with the NASAA last December. To date, Alabama ($5,073), Connecticut ($12,602), Maine ($1,517), Michigan [...]