The SEC regulation are their to prevent companies taking advantage of naive investors. From what I've read Prosper mis-represented the risks of these loans, whi

The SEC regulation are their to prevent companies taking advantage of naive investors. From what I've read Prosper mis-represented the risks of these loans, which is precisely the kind of thing which SEC regulated companies are not allowed to do. Regulations exist for a reason. As long as your willing to follow the regulations (which exist to prevent mis-selling, market abuse, insider trading, and other such things) getting SEC approval isn't that hard. The other alternative is to partner with a regulated firm and use their approval, this it the route Zopa has taken. But again you need to make sure your company follows SEC guidelines.