Relevant Quotes From The Filing (PDF)
… Prosper excluded Prosper securities linked to certain charged-off consumer loans from its calculation of ANR. Prosper failed to identify and correct the error despite its employees’ knowledge that Prosper no longer understood how the code underlying the ANR calculation operated, and despite investor complaints about possible errors in their reported ANR
As a result, Prosper miscalculated and materially overstated the ANR it reported to a total of more than 30,000 investors during the relevant period. It made these misstatements on investors’ online account pages and in emails soliciting additional investments in Prosper securities. Many investors made additional investments in Prosper securities based in part on the overstated ANR …
Does this sound familiar to anywhere you have worked before as a developer? I know it does to me. Technical debt is okay for a little while if you need to move fast, but it can kill your company/product if it is never addressed later on. Make sure you are setting aside time to address technical debt as a regular part of your software development cycle.