Sounds pretty much like what some macho a-holes in sales would do. Ten grand seems like chump change for this kind of thing. If it's not really torture, they should just let Hudgens do it back to them. That'd be worth more than $10k to me.

It is easy to buy small plaster models of what you think life is like.

It seems to me that whether or not it's legally "torture" doesn't matter.  After all, the voluntary participant only found out that he what happened was "waterboarding" after talking about it with a friend.  

What matters, in my opinion, is that the employee underwent what amounted to a life-threatening ordeal at the hands of his manager.  Even if the manager didn't know that it was waterboarding, that the manager did not adequately consider that he could have killed or permanently brain-damaged the employee with such an act shows that the manager does not have any judgment.  As such, the manager is a liability to the company.

They sell "mentoring?" Give me a break, they sell hot air, and their salespeople know it.  That means Hudgens was a scam artist too, since he was quite willing to supervise a team selling hot air.

Given that he's a scam artist, he's a pretty cheesy one, since anyone with two neurons would understand that an assault like that is worth millions...although I doubt that Prosper has millions, or an insurance policy worth millions.  I suspect Hudgens decided $10K was the best shut-up money he could get out of them, based on what he knew about the company.  If he went bigger and won (inevitably) they'd never pay, so he'd have wasted his time.  But $10K is a reasonable enough sum that they'd be likely to be able to afford it just to make him go away.