Marketplace lender Prosper miscalculated and materially overstated its annualised net returns to investors, according to the US Securities and Exchange Commission, which slapped the online lender with a $3m fine last month.
The SEC said the company failed to fix the error despite investor complaints, adding that Prosper itself did not understand how its annualised net returns were calculated.
According to the SEC’s press release
, the lender excluded certain non-performing charged off loans from its calculations of annualised net returns. The