Penson Worldwide Inc fka PNSNQ

[fourkids_9pets]

SEC Charges Clearing Firm Officials for Improper Margin Loans, Accounting and Disclosure Failures

FOR IMMEDIATE RELEASE
2015-194

SEC order
http://www.sec.gov/litigation/admin/2015/33-9914.pdf

SEC complaint
http://www.sec.gov/litigation/complaints/2015/comp-pr2015-194.pdf

Washington D.C., Sept. 17, 2015 — The Securities and Exchange Commission today announced charges against four former clearing firm officials for their roles in a series of accounting and disclosure failures stemming from decisions to extend credit to certain customers beyond what is allowed under the federal securities laws.

An SEC investigation found that clearing broker-dealer Penson Financial Services, whose publicly-traded holding company was Penson Worldwide, provided customers nearly $100 million in margin loans secured mostly by risky, unrated municipal bonds such as those funding a horse racetrack in Texas that one of the customers operated. The loans to these customers—some of which were used to fund the racetrack’s operations—became impaired in the wake of the financial crisis. Instead of liquidating the collateral, accounting properly for the loan losses, and disclosing the situation to Penson’s investors, the firm extended more loans to these customers in violation of federal margin regulations in the hope that their financial condition would consequently improve and they could pay back the loans. Penson and the customers were counting on satisfying the customers’ margin calls if and when Texas changed its gambling laws to allow slot machines at horse racetracks. But the laws didn’t change and Penson’s situation never improved. Penson’s eventual accounting and disclosures of the loan losses that reached $60 million contributed to a series of events resulting in Penson’s bankruptcy in 2013.

“Penson took on extraordinary risks as a broker-dealer by making margin loans to certain customers backed by speculative collateral,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “When these loans became impaired, Penson’s leadership improperly placed more of Penson’s critical capital at risk to bail out these customers instead of timely recording the losses and disclosing the truth about the loans to investors.”

The Penson officials agreed to settle the charges in administrative proceedings without admitting or denying the SEC’s findings:
Philip A. Pendergraft, Penson’s co-founder and a director/CEO of Penson Worldwide, was responsible for the improper loans to the customers as well as the improper accounting treatment and lack of disclosures about the loans in Penson’s public filings. He agreed to pay a $100,000 penalty and be barred from the securities industry.

Kevin W. McAleer, CFO of Penson Worldwide, was responsible for the improper accounting treatment and lack of disclosures about the loans in Penson’s public filings. He agreed to pay a $25,000 penalty and be suspended for one year from appearing or practicing as an accountant for SEC-regulated entities.
Thomas R. Johnson, a director of Penson Worldwide and also at the company that operated the horse racetrack, was a cause of Penson’s disclosure failures. He agreed to pay a $25,000 penalty.
Charles W. Yancey, Penson’s president and CEO, failed to supervise Pendergraft in his capacity as a registered representative. He agreed to pay a $25,000 penalty and be suspended for six months from working in a supervisory capacity in the securities industry.

The SEC separately filed a complaint in federal court in Miami against one of Penson’s customers, Christopher J. Hall, who was chairman of the board for the company that operated the horse racetrack. The SEC alleges that Hall lied about the status of his collateral while fraudulently obtaining $6.8 million in loans or credit from Penson. The SEC’s complaint against Hall seeks disgorgement of ill-gotten gains plus interest, penalties, an officer-and-director bar, and a permanent injunction.

The SEC’s investigation was conducted by Melissa Armstrong, Robert Besse, Rachel Nonaka, Mark Oh, and Gary Peters. The SEC’s litigation against Hall will be led by Ms. Armstrong and David Johnson. The SEC appreciates the assistance of the Public Company Accounting Oversight Board and the Financial Industry Regulatory Authority.

###

http://www.sec.gov/news/pressrelease/2015-194.html

original link courtesy of alanc

==
4kids

[SevenTenEleven]

Very revealing. Even more revealing are the documented cases of those protecting the naked short selling cartels, and their ability to attack anyone who reveals the truth about naked short selling. Penson has exposed the naked truth about the criminal naked short selling operations, and the total disregard the brokers, market makers, and clearing houses have for the rules and regulations.

It also doesn't hurt to have the likes of Gary Weiss, Richard Marchese, and Jess Haberman working in your corner.

Tic Toc Text

[Outlaw]

Revealing post... :)

[SevenTenEleven]

Why Penson's Letter To SEC On Matt Taibbi Changes Everything

John Carney

Oct. 7, 2009, 11:45 AM


Rolling Stone columnist Matt Taibbi hasn't responded to the letter made public yesterday by Penson Financial Services, which he accused of a serious securities law violation in a blog post the other day. But while we wait for Taibbi's response, it's worth noting how that letter changed the terms of the debate.

For those of you joining this program already in progress, here's a quick recap.

* Matt Taibbi posted a video that he said showed how naked short selling happens. The video was labeled "Pension Approves Billion Dollar Naked Short."

* We challenged the authenticy of the video.

* There was some boring squabbling when Taibbi said that despite writing the "trade went through" his video was about a locate and not a trade.

Penson, a major US clearing firm, had denied that the video showed a trade or a locate taking place on their system. We found their denial persuasive because of the collaborating evidence and talks with traders who use Penson. But it was always an outside possibillity that Penson way pulling the wool over our eyes after being caught doing something against the rules.

Now Penson has effectively closed off that possibility by denying the video in the strongest possible words.

* ""The purpose of this letter is to inform you of an apparent hoax and unsupported accusation of a violation of Regulation SHO by Penson."

* "The purpose of this letter is to inform you that Taibbi's post is based on false information."

* "While we are uncertain whether Taibbi's article is the result of a hoax or something more deliberate..."

* ""There was no locate at the time of the video"

Penson didn't try to use legal technicalities that might leave them room to later admit that they were just denying a legal violation but not the underlying facts as portrayed in the video. They come right out and say in plain language that Taibbi is wrong.

"I don't see much wiggle room here," veteran business reporter Gary Weiss writes on his blog. "Penson is saying that the video is either a hoax or something worse than a hoax, something 'more deliberate.' I guess that's a gentle way of saying that Taibbi made the whole thing up."

(For the record: we certainly do not think Taibbi made the whole thing up. He's a good writer, smart and appears to be an honest guy. He was probably just misled about the video by someone else. That happens pretty often to lots of people, even very good journalists.)

"So either Penson Financial Services is a bunch of crooks that just committed a criminal act and compounded it by lying to the SEC, or Matt Taibbi is the victim of a hoax." Weiss writes. "There is no third alternative."

For us the clincher is the fact that Penson wrote the letter to the SEC. If they were a guilty party, they would have to be absolutely insane to do this. The letter is sure to alert the SEC to the matter, and may even prompt an investigation. This isn't the way a company with dirty hands acts. It would unnecessarily dramatically increase their legal exposure.

A crooked company would probably refuse to comment about "stories posted to the internet" at all. If they did comment, they'd simply deny the story to the press. They'd stay quiet about it to officials, hoping the SEC would never get involved. If the SEC got involved anyway and discovered wrong doing, they'd find themselves paying a fine and promising never to do the bad thing again.

The letter to the SEC makes the consequences of wrong-doing far more serious. The agency is now alerted to the problem. If it is discovered the Penson is lying, Penson could well be put out of business. At the very least, it's executives would likely find themselves thrown out of the securities industry for life and possibly facing criminal charges. Why would Penson bring this risk on themselves if they had dirty hands?

With Penson's letter, we went from a debate between bloggers to a new level involving securities firms and government agencies. We may well get an SEC investigation of the matter. The letter changed everything.

http://www.businessinsider.com/john-carney-why-pensons-letter-on-matt-taibbi-changes-everything-2009-10

[Outlaw]

Maybe now that they let cat is out of the bag...could they possibly do the RIGHT THING?...not holding my breath on that one.

(Yes would tend to agree that the IRS, would NOT be so accommodating)

Keeping watch for the complaints naming the colluding entities. ;)

Did they ever post the stocks that Penson shorted???

Could NOT seem to find them (shorted stocks) in the complaint...hmmm :(

jmo fwiw

[fourkids_9pets]

exactly .. realize tho' that the sec (aiders and abetters that they are)
can't do >> what should be done >> without imploding the entire
US equities market .. which leaves them imo in a very revealing *dance*

others have noted *here* that the IRS isn't so accommodating .. we'll see
the cynic in me is rearing its head re: those bought and paid for a decade back

4kids
all jmo

[UnderR8D]

none of the shareholders who were victims of the fraud will get anything, that's for sure.....whether they fall or not , who knows, but I wouldn't be surprised

[UnderR8D]

I disagree on the opinion that the funds would be raided.
Once the money leaves the US, it is next to impossible to recover.

[Outlaw]

Waiting for the next 2 shoes to drop...LOL
(so to speak)

Explains "we cant find your cert" ... ooops ;)

[fourkids_9pets]

shocka ;)

5.22.11 >> post

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=63427874

4kids
all jmo

[SevenTenEleven]

No doubt the FBI, DHS, DOJ, and US Treasury know exactly where the illicit funds have been routed. Those off shore accounts are bout to be raided, IMO.

[UnderR8D]

Like always, the regulators are a day late and a dollar short, no pun intended... Yes Penson is dead and gone, however all of their illegal activity which harmed investors will never be recovered.

[fourkids_9pets]

oh the CON side of the usual entity that worked the vehicle of choice
re: OTC stock manipulation

i called it the perfect crime

because no one gave a damn about legit OTC co.s

the *rumor* was PENSON Canada hired the *crews* (both sides represented)
and when the cycle of money orchestrated UP was complete
the CON side took over

usually the appearance of these *heavy lifters* would ensure that
*retail* would sell first and ask ?s later

the joy of having patience and documenting and *reading*

if said CON appearance *failed* >> then certs held in PENSON's US vault
(which one from the CON side said never existed) >> snicker

could be utilized .. and as many have figured out >> they all COLLUDE

because they could

now i just want to see when the next *brokerage* firm up to their eyeballs in *markers*

gets their turn in the spotlight

and of course the outing of the *crew* that first piqued my curiosity by the subsequent
rehabbing of image (in total) >> after destroying a legit OTC co.
that used to employ 35 of my fellow Americans

4kids
all jmo

[shadymon]

Names?

[SevenTenEleven]

Looks as if Patrick Byrne, was not crazy after all! Penson moved billions, if not trillions of dollars offshore while they naked short sold stocks and securities. It will be interesting to see if the US Treasury will be able to go after the laundered funds.

Tic Toc

[fourkids_9pets]

worth *digesting*

to see just how many stox would require buyins

http://www.sec.gov/litigation/admin/2014/34-72185.pdf

seriously pathetic what the dolts (sec) have allowed to happen to US equities

nice to be owned outright to the highest bidder

==
4kids
all jmo

[fourkids_9pets]

gee and to think i was called *tin foil*
for articulating exactly as >> penson >> snicker >> was >> *charged*

they all collude and clearly even the *dolts* (aka sec)
have cottoned onto the *reality*

“This enforcement action seeks to hold Penson executives responsible for choosing profits over compliance with Reg. SHO,” said Andrew J. Ceresney, director of the SEC’s Enforcement Division. “We will aggressively pursue those who disregard this important rule, especially when they take affirmative steps to mislead regulators.”

Daniel M. Hawke, chief of the SEC Enforcement Division’s Market Abuse Unit, added, “Compliance officers are a critical line of defense against violations of the securities laws, and we rely on them to help prevent infractions from happening in the first place. Delaney, however, crossed the line when he participated in the firm’s Reg. SHO violations and affirmatively acted to perpetuate or conceal them.”

The SEC adopted Rule 204 in response to the 2008 financial crisis in order to address the negative effects that fails to deliver have on the markets. The SEC’s Enforcement Division alleges that when Penson loaned securities held in customer margin accounts to third parties and the margin customers sold those securities, Penson waited until settlement date (T+3) to recall the stock loans. This practice resulted in serial failures to deliver at the firm level. Rule 204 required Penson to purchase or borrow sufficient shares to close out those failures to deliver no later than the beginning of regular market hours on the sixth business day after the sale (T+6).

2 down >> 2 to go

4kids
all jmo

[fourkids_9pets]

SEC Announces Charges Against Four Former Officials at Clearing Firm Penson Financial Services for Regulation SHO Violations

FOR IMMEDIATE RELEASE
2014-101
Washington D.C., May 19, 2014 — The Securities and Exchange Commission today announced charges against four former officials at clearing firm Penson Financial Services for their roles in Regulation SHO violations.

An SEC investigation found that Penson’s securities lending practices intentionally and systematically violated Rule 204 under Reg. SHO. The SEC’s Enforcement Division alleges that Penson’s chief compliance officer Thomas R. Delaney II had direct knowledge that the firm’s procedures for sales of customer margin securities were resulting in rule violations, yet he didn’t take steps to bring Penson into compliance and instead affirmatively assisted the violations. Penson’s president and CEO Charles W. Yancey ignored significant red flags about Delaney’s involvement in the violations and the fact that he was concealing them from FINRA and the SEC. Penson has since filed for bankruptcy.

Two former Penson securities lending officials – Michael H. Johnson and Lindsey A. Wetzig – were charged in administrative proceedings and agreed to settle the charges. The SEC Enforcement Division will litigate the charges against Delaney and Yancey in a separate proceeding.

“This enforcement action seeks to hold Penson executives responsible for choosing profits over compliance with Reg. SHO,” said Andrew J. Ceresney, director of the SEC’s Enforcement Division. “We will aggressively pursue those who disregard this important rule, especially when they take affirmative steps to mislead regulators.”

Daniel M. Hawke, chief of the SEC Enforcement Division’s Market Abuse Unit, added, “Compliance officers are a critical line of defense against violations of the securities laws, and we rely on them to help prevent infractions from happening in the first place. Delaney, however, crossed the line when he participated in the firm’s Reg. SHO violations and affirmatively acted to perpetuate or conceal them.”

The SEC adopted Rule 204 in response to the 2008 financial crisis in order to address the negative effects that fails to deliver have on the markets. The SEC’s Enforcement Division alleges that when Penson loaned securities held in customer margin accounts to third parties and the margin customers sold those securities, Penson waited until settlement date (T+3) to recall the stock loans. This practice resulted in serial failures to deliver at the firm level. Rule 204 required Penson to purchase or borrow sufficient shares to close out those failures to deliver no later than the beginning of regular market hours on the sixth business day after the sale (T+6).

According to the SEC’s orders instituting administrative proceedings, Penson’s securities lending personnel including Johnson and Wetzig knew about Reg. SHO’s close-out requirements, but determined not to comply with them. Instead, they allowed the firm-level failures to deliver to persist until the borrowers returned the recalled shares, which often did not happen until the close of business on T+6. In some circumstances, Penson’s securities lending personnel allowed the failures to deliver to persist beyond the close of business on T+6.

The SEC Enforcement Division alleges that Delaney discussed Penson’s non-compliant procedures with Johnson and learned that the firm’s non-compliance with the regulation was intentional. He then agreed with Johnson not to change the procedures to bring Penson into compliance with Rule 204 because they did not want the firm to incur the costs of doing so. Delaney also approved written supervisory policies and procedures (WSPs) that he knew concealed the non-compliant procedures at the firm, and then he further concealed the violations in numerous communications with the SEC and FINRA. Meanwhile, Yancey failed reasonably to supervise Delaney and Johnson. He ignored Delaney’s efforts to conceal the violations from regulators. And despite being designated as Johnson’s direct supervisor, Yancey exercised no supervision over Johnson whatsoever.

Johnson consented to an SEC order finding that he willfully aided-and-abetted and caused Penson’s violations. He agreed to pay a $125,000 penalty and be barred from the securities industry for at least five years. He must cease and desist from committing or causing violations of Rule 204. Wetzig consented to an order finding that he caused Penson’s violations. He agreed to be censured and must cease and desist from committing or causing violations of Rule 204(a). Johnson and Wetzig neither admitted nor denied the findings.

The SEC’s investigation was conducted by Jonathan Warner and Jay Scoggins of the Market Abuse Unit and Denver Regional Office. The case was supervised by Mr. Hawke. The SEC’s litigation will be led by Polly Atkinson and Nicholas Heinke of the Denver office.
###

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370541860014#.U3pi1PldVyJ

[jas2]

"Thanks much."

[Renee]

Yes, Jas2, to both of your questions. Best wishes to you!!

[jas2]

Renee,

Does that mean that PNSN is now considered a worthless stock?
Can we write it off on our 2013 tax return?

[Renee]

PNSNQ: Plan of bankruptcy effective. All shares cancelled.

http://www.otcbb.com/asp/dailylist_detail.asp?d=08/16/2013&mkt_ctg=NON-OTCBB

[richboy1]

http://www.law360.com/securities/articles/461572/broker-penson-gets-nod-for-ch-11-liquidation-plan

[TheFinalCD]

odd range yesterday .01-.0016 PNSNQ

[SevenTenEleven]

PNSNQ - Are ex-Penson brokers attempting to strong arm shareholders into selling and closing out positions in their accounts for OTC stocks?

Appears that ZECCO may be attempting to do such a thing to a number of shareholders in a number of stocks that appear to have been targets of ex-clearing generated counterfeit electronic equity markers.

Are these markers being internally tracked with invalid cusip #'s by some, or all of these ex-Penson retail brokers?

If you have a retail account, and your broker cleared with Penson, you might want to check account balances to make sure all of you holdings are there and make sure they are using authorized cusip #'s for your positions.

Don't let your broker harass you!

Make them go after the individuals who sold them the counterfeit electronic equity markers that they deposited into your account!

Tic Toc

[buyittradeit]

guess it was bk ouch

[AliEn BRaInZ stox]

I take it PNSN doesn't have options anymore.. BWAA !!! ROTHFFL ~

[AliEn BRaInZ stox]

So what exactly happens at Penson these days? I wonder who is clearing their stock without fees.. Is this chilled yet ??

[AliEn BRaInZ stox]

Freaking riot imop >> PNSN ROLF .. HAHAHAHAHHAHA !!!!!!!!!

[SevenTenEleven]

PNSNQ - It will be interesting to see their books. LOL!

As if the SEC, FINRA, and the DTCC wants to allow the public to see how much crime and corruption was run out of this organization. We will never know the full amount of damage done by this organization.

[Howzitgoing]

Penson didn't even bother to pay its Microsoft licenses to the tune of $730,943 in addition to a long list of creditors. Yep, this is gonna be entertaining.

[AlanC]

That should be one interesting bankruptcy filing!

[SevenTenEleven]

PNSNQ - Penson Worldwide, Inc. (PNSN: OTC Link) | Symbol Change

Mon, Jan 14, 2013 12:00 - Penson Worldwide, Inc. (PNSN: OTC Link) - Symbol Change - The symbol, PNSN, is no longer a valid symbol for Penson Worldwide, Inc.. As of Mon, Jan 14, 2013, the new trading symbol is PNSNQ. You may find a complete list of symbol changes at otcmarkets.com.

[ErnieBilco]

The court should require a giant L to be tattoed on his head so when he goes looking for another company to destroy they can be sure they don't hire him....... but the way things go there will be a company who owes him something and will give him a cushy job as payback.

JMO

[kenbkb]

Realistically, the CEO should be put out to pasture.

So what is left for investors, maybe 2 cents on the dollar?

[ErnieBilco]

What exactly did they expect after putting all kinds of conditions on buying securities? They basically destroyed their own company by pretending to protect investors. Glad they are soon to be history, just hope the CEO doesn't get into another company where he can destroy yet another company.

JMO

[fourkids_9pets]

2 down .. 2 to go

no surprises .. :)

==
4kids
all jmo

[jaxstraw]

Declaration in Support of First Day Petition

http://www.scribd.com/doc/120045213/PENSON-Declaration-in-Support-of-First-Day-Petition

[jaxstraw]

FIRST DAY PETITION

http://www.scribd.com/doc/120044675/PENSON-First-Day-Petition

[SevenTenEleven]

PNSN/PNSNQ - Sinking to sub penny level soon!

This one high flying naked short selling collaborator is finished!

Tic Toc

[Renee]

PNSN changed to PNSNQ:

http://www.otcbb.com/asp/dailylist_detail.asp?d=01/11/2013&mkt_ctg=NON-OTCBB

[Cooky]

I am in agreement with you...Just starting.

[SPM555]

The chart + recent price action has the makings of a short squeeze, imo we're going to see this stock pop out some long green candles in the next week or two. I certainly could be wrong but I've played enough of these to know what to look for and I'm confident we'll see this continue to get squeezed here.

[BigBake1]

They may submit to FINRA for a name change in the future if they so desire along with a symbol change to reflect the new company. But at this time I have a feeling it is the least of their worries since they were trying to avert BK after taking it over.

[kenbkb]

Please excuse my ignorance, but if the entire remaining business was bought out by Apex, is this really PENSON INC, dba APEX CLEARING?

Or why would they not change names (that might actually help!)?

[BigBake1]

Penson was bought out by Apex Clearing, it is still the same, it is a Reverse Merger Process.

2 million shares is a lot when there are only 28 million outstanding shares, that is 7% of the total shares issued, and more than 10% of the trading Float. It takes just 10% of average volume to influence a security trading direction. @ million is huge in the scope of things currently.

I have no idea if they will report again, I am certain that all depends on the PPS. They do not meet the minimum requirement to be listed on the NASDAQ any longer.

I doubt they waste the money filing, as being a fully reporting OTC security means very little to the clientel they deal with.

I stated twice yesterday it is currently purely TECHNICAL in basis, a solid bottom is in place after the stock was vastly oversold. It creates a bounce effect, where it goes from here is anyones guess. But technicals will ikely play the GAP betwen .05X to .07 and likely higher.

There is no notice or filing involved in covering a short position, you will just see massive volume flow in once the price starts running up and then that will increase rapidly as well as the buyer tries to purchase 2 million shares at the cheapest prices possible on the Ask.

The next Short Interest reporting period that covers this date will be mid January.

[kenbkb]

big bake, I thought Penson was removed from their trading biz with the formation of Apex?

In one sense, 2m shares does not seem like that much. But I will take it. So they are never going to report again? Will they have to continue applicable SEC filings? So what part of their business remains? And this move is being driven by what, some knowledge of increased biz in their remaining operations, or some techinical move?

Finally, if one covers a short of this magnitude, how quickly do they file notice of such?

Impressive move here no matter what, this is a double in a week.

[BigBake1]

Actually NITE is not shorting it, in fact NITE owns no positions in accordance with their 13F filed. Now an instituional investor has in fact shorted it with a little over 2 million shares starting in the begining of October and has yet to cover in accordance with the Short Interest report. That should be in the .05 range and if this continues moving up they will be forced to cover that huge position.

I doubt it, in fact Apex is generating revenues, with over 33 million on the books, it is not going anywhere anytime soon. In fact Apex is quite stable for the moment and can actually increase in price to it's booked value. They avoided BK here for now and it appears they are on track on retaining their clearing business.

[SevenTenEleven]

PNSN - Yep! $0.05 so NITE could continue shorting!

This needs to push towards .05 to create the pressure on that 2 million in short interest sitting out there.

Penson going to No Bid x $0.0001

[BigBake1]

It already has filed a Form 15 to go dark.

http://ih.advfn.com/p.php?pid=nmona&article=54601972