The SEC, in its quest to protect investors, has shut down Prosper, the peer-to-peer site that connected lenders and borrowers. It looks like Prosper claims it's a marketplace but the SEC asserts that it is enabling investments without proper licensing.
Details aside, I think this is a stupid move by the SEC, not to mention, ironic. While we're dealing with the mess created by the very industry the SEC is tasked to watch over, here they are shuttering a service that would probably provide some relief, albeit small, to the pains caused by the unprecedented tightening of credit caused by their failure.
I am a fan of P2P lending and think that the value it creates far overshadows the risks it introduces. I am rooting for Prosper in this battle.