SEC Reported To Be Looking Into CAN Capital and Prosper
Bloomberg reporter Matt Scully reiterated on Friday that the SEC is looking into CAN Capital “after that firm failed to report to bondholders that some customers’ loans were in default.” That was referencing a previous December inquiry reported back in February. CAN’s $200 Million securitization suffered a rapid amortization event in the second half of 2016, compounding other problems including a reported breach with their Wells Fargo credit facility. The company never quite recovered despite CAN’s Acting CEO, Parris Sanz, telling the WSJ back in January that the problems were akin to changing a flat tire. The previous CEO along with the company’s chief risk officer, chief financial officer, and chief marketing officer have all left.
Bloomberg also reported that online consumer lender Prosper is being probed by the SEC after they disclosed that they had overstated investor returns. The inquiry was said to only be in a preliminary stage.
Update: The inquiry with CAN originated in December but it was not widely reported. The above has been edited to reflect the timing. Last modified: May 31, 2017