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MMTE Zecco Penson discussion

Problem summary

1. Investors in MMTE were eagerly awaiting news on MMTE scheduled for May 5, 2011.

2. On May 4, Zecco suddenly started telling investors they could not use the electronic clearing apparatus to trade MMTE shares. All purchases would have to be done by a broker, and that there would be a cost of $200-700 per trade!

3. If you want to transfer your shares elsewhere, there would be a $50 fee to do so and it will take 7-20 days.

4. Effectively, we were suddenly not allowed to freely trade shares on the eve of a major announcement.

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Possible explanations
• The reason given by Zecco to several posters was that Penson had imposed a trading restriction which would require that hand-process certificates, which takes much more time and effort, hence the high fees.
• There is good speculation that the reason for the sudden change is that MMTE is uplisting. If that is the case, hopefully this problem will resolve shortly.
• Of interest, Penson Financial is also a market maker – PFSI.


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Search for new broker that doesn’t use Penson

Brokerages that clear their own stocks without Penson have not imposed similar penalties so far. I am looking now for a non-Penson brokerage

OnlineBrokerreview.com has a chart showing the following brokers all use Penson – to be avoided

- eOption
- Firstrade
- OPtionsHouse
- Scottrade
- Sogotrade
- Thinkorswim
- Zecco
http://www.onlinebrokerrev.com/2011/01/broker-clearing-firms.html

Not sure about Scottrade. I called Scottrade specifically today if ask if they use Penson and the rep said no, so not sure if the list is incorrect or the rep.
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Traders – please use this board help understand this problem and post your solutions. Please share what you learn in a format that will form a knowledge bank for others going through similar situation in the future. Thanks.