Worthless Securities DTCC Non-Transferable list (PENSON)

[MaxShockeR]

i really do hope they fall they managed the company like dogs and when it goes bad they make the clients pay for there illegal actions, if only they would at least let people close positions they had open before that new rules they put in place without any extra nonsense fees they would'nt be in such BS problems.

if they do go BK all brokers will obviously change "Clearing Firms" so that will let people trade what they want, when they want, maybe for a little higher price, but at least it will be hassle free.

if it looks like im ranting, frankly i am :P Penson pissed me off LOL ...

[$hellKing]

Looks like its a good short. Probably will be BK in a year. But just guessing. Every time you see all that stuff happening the stock tanks and shorts come in and co goes belly up.

[Zardiw]

WEEEEEEEEEEEEEEEEEEEEeee...........et z

[MaxShockeR]

Penson's restructuring plans & Letter of New Low price Security Policy


> Penson Worldwide plans restructuring, posts wider Q2 loss

Thu Aug 4, 2011 6:32pm EDT

(In paragraph 12, corrects interest expense numbers on long-term debt)

* To restructure co, cut debt

* To sell assets to raise capital

* Q2 loss/shr $1.06vs $0.29 yr-ago

* Q2 oper loss $0.12/shr

* Q2 rev $78.5 mln

Aug 4 (Reuters) - Penson Worldwide Inc , which posted a fifth straight quarterly loss on Thursday, said it plans to restructure itself after the securities clearing firm was hurt by low trading volumes and depressed interest rates.

Declining trading volumes have forced companies like Investment Technology Group and electronic trader Knight Capital to downsize their work force and cut costs.

Penson Worldwide, which has a market capitalization of $75 million, has lost nearly half its value since making troubling collateral disclosures in May.

The company said it is in talks to sell Penson Financial Services Ltd in London, and exploring options to run its Australia unit as a partnership or go in for an outright sale.

Penson, which has seen price target cuts from brokerages in July, said it expects the restructuring to help it save $24 million annually, and hopes to raise $100 million from the sale of assets.

The company said it would expand its outsourcing agreement with Broadridge Financial Solutions to include Penson's data centres and save an additional $15-$18 million. It's current agreement with Broadridge helps it save $7-$10 million.

Penson will also combine its U.S. futures and broker-dealer business into Pension Financial Services to free up $30 million in regulatory capital and cut costs by $2 million annually.

Chief Executive Phillip Pendergraft said in a statement that the clearing firm is "determined to return to profitability."

The cost savings and increased liquidity are expected to make the company profitable, strengthen the regulatory capital position of its operating units and pay down debt.

For the second quarter, Penson Worldwide's net loss widened to $30.2 million, or $1.06 per share, from $7.4 million, or 29 cents a share, last year.

Loss from operations was $3.5 million or 12 cents per share.

The interest expense the company had to pay on its long-term debt rose to $9.7 million from $7.4 million last year.

Shares of the Dallas-based company closed at $2.61 on Thursday on the New York Stock Exchange. (Reporting by Rachel Chitra in Bangalore; Editing by Roshni Menon)

> Penson Letter...New Low price Security Policy Aug 13 2011

http://www.moneywrx.com/pennies.pdf



http://investorshub.advfn.com/boards/read_msg.aspx?message_id=66717970

[MaxShockeR]

Penson under investigation Over Possible Violations Of Securities Laws


> Penson Worldwide Inc Under Investor Investigation Over Possible Violations Of Securities Laws

After PNSN shares fell almost 50% within days an investigation on behalf of investors in shares of Penson Worldwide, Inc. (NASDAQ:PNSN) over possible violations of Federal Securities Laws was announced.

The investigation by a law firm concerns on whether the Penson Worldwide, Inc. or others have violated federal securities laws by issuing false and misleading statements to the investing public.

Penson Worldwide’s 12months Total Revenue decreased from $404.80million in 2007 to $310.62million in 2010. Its Net Income fell from $26.83million in 2007 to a Net Loss of $19.85million in 2010.

Shares of Penson Worldwide, Inc. (NASDAQ:PNSN) fell from as high as $31.50 during 2007 to $4.34 in 2009 and $4.61 during September 2010.

During the first months of 2011 PNSN shares reached over $7 per share.

Then on May 9, 2011 Penson Worldwide, Inc filed its quarterly report with the U.S. Securities and Exchange Commission. In the report Penson Worldwide, Inc disclosed, among other things, that: “With respect to the Nonaccrual Receivables, at March 31, 2011, […] approximately $42.6 million were collateralized by bonds issued by the Retama Development Corporation (“RDC”) and certain other interests in the horse racing track and real estate project […] financed by the RDC’s bonds.
In each case these are owned by customers and pledged to the Company and/or its affiliates.

Certain related parties to the Company own approximately $14.7 million of RDC bonds that are pledged to the Company and/or its affiliates […].”

Then on May 12, 2011 PNSN stock fell to $2.74 per share after Penson Worldwide, Inc announced that on the same day Mr. Thomas R. Johnson delivered notice of his immediate resignation as a member of the Board of Directors of Penson Worldwide, Inc.
Penson Worldwide, Inc disclosed that “based on Mr. Johnson’s position as chief executive officer of Call Now, Inc, a holder of a portion of the Retama related collateral, both Mr. Johnson and the Company felt it appropriate for him to resign his position at this time.” Philip A. Pendergraft, Chief Executive Officer of Penson Worldwide, Inc said in the May 12 announcement that they “believe the activity of the Company’s stock related to the Retama related collateral is unwarranted.” And that they hope this news release will aid in putting this issue to rest”.

Shares of Penson Worldwide, Inc. (Public, NASDAQ:PNSN) closed on Friday May 13, 2011 at $3.34 per share.
Shareholders Foundation, Inc.
www.ShareholdersFoundation.com

> May 11 2011 Penson Worldwide, Inc. Says Market Activity Related to Non Accrual Receivables
http://www.businesswire.com/news/home/20110512006938/en/Penson-Worldwide-Market-Activity-Related-Accrual-Receivables

[MaxShockeR]

Multi Class Action Lawsuits Against Penson Worldwide


> Thursday, 25 Aug 2011 06:01pm EDT

The Rosen Law Firm, P.A. announced that a class action lawsuit has been filed on behalf of investorswho purchased the common stock of Penson Worldwide, Inc during the period between February 10, 2011 and August 4, 2011, inclusive (Class Period), seeking to recover damages for violations of federal securities laws. According to the Complaint, during the Class Period Penson concealed from investors that: (a) the Company had approximately $96-97 million in receivables, of which approximately $43 million were collateralized by illiquid securities and therefore unlikely to be collected; (b) the Company's assets (Nonaccrual Receivables) were materially overstated and should have been written down; (c) as a result, the Company's reported income and EBITDA (earnings before interest, taxes, depreciation and amortization and stock-based compensation, and excluding certain non-operating expenses) were materially overstated; and (d), the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles.

> Thursday, 25 Aug 2011 12:58pm EDT

The Briscoe Law Firm, PLLC, and the securities litigation firm of Powers Taylor, LLP announced that a class action has been filed against Penson Worldwide, Inc for alleged violations of federal securities laws. The firms are investigating additional legal claims against the officers and Board of Directors of Penson related to potentially misleading statements issued by Penson between February 20, 2011 and August 4, 2011 (Class Period).

> Wednesday, 24 Aug 2011 08:15pm EDT

Law Offices of Howard G. Smith announced that a class action lawsuit has been filed on behalf of purchasers of the common stock of Penson Worldwide, Inc between February 10, 2011 and August 4, 2011, inclusive (the Class Period), seeking to pursue remedies under the Securities Exchange Act of 1934. The class action lawsuit was filed in the United States District Court for the Northern District of Texas. The Complaint alleges that during the Class Period, Penson concealed from investors that by at least the end of 2010: (1) the Company had approximately $96-97 million in receivables, of which approximately $43 million were collateralized by illiquid securities and therefore unlikely to be collected; (2) the Company’s assets (Nonaccrual Receivables) were materially overstated and should have been written down at least by the end of 2010; (3) as a result, the Company’s reported income and EBITDA (earnings before interest, taxes, depreciation and amortization and stock-based compensation, and excluding certain nonoperating expenses) were materially overstated; and (4), the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles.

> Wednesday, 24 Aug 2011 01:06pm EDT

Federman & Sherwood announced that on August 23, 2011, a class action lawsuit was filed in the United States District Court for the Northern District of Texas against Penson Worldwide, Inc The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material misrepresentations to the market which had the effect of artificially inflating the market price. The class period is from February 10, 2011 through August 4, 2011.

> Aug. 24, 2011, 4:34 p.m. EDT

The Law Firm of Levi & Korsinsky Notifies Investors With Losses on Their Investment in Penson Worldwide, Inc. of Class Action Lawsuit and Lead Plaintiff Deadline of October 24, 2011

NEW YORK, NY, Aug 24, 2011 (MARKETWIRE via COMTEX) -- Levi & Korsinsky announces that a class action lawsuit has been commenced in the United States District Court for the Northern District of Texas Dallas Division on behalf of purchasers of Penson Worldwide, Inc. ("Penson" or the "Company") /quotes/zigman/97840/quotes/nls/pnsn PNSN -2.83% common stock from February 20, 2011 through August 4, 2011.

For more information, click here: zlk.9nl.com/penson-worldwide .

Prior to and during the Class Period, Penson derived a material part of its revenue and income from interest it received on margin loans to customers for which its customers pledged collateral in return for such loans.

The complaint alleges that during the class period, defendants issued materially false and misleading statements regarding and concealed from investors that, by at least the end of 2010, a) the Company had approximately $96-97 million in receivables ("Nonaccrual Receivables") of which approximately $43 million were collateralized by illiquid securities and therefore unlikely to be collected; b) the Company's Nonaccrual Receivables were materially overstated and should have been written down at least by the end of 2010; c) as a result, the Company's reported income and EBITDA were materially overstated; and d) the Company's financial statements were not prepared in accordance with generally accepted accounting principles (GAAP).

If you are a member of the class and suffered a loss in Penson stock, you have until October 24, 2011 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. To obtain additional information about your rights, contact Joseph Levi, Esq. either via email at [e-mail] or by telephone at [phone], or visit http://www.zlk.com/penson-worldwide-pnsn.html .

Levi & Korsinsky has expertise in prosecuting investor securities litigation and extensive experience in actions involving financial fraud and represents investors throughout the nation, concentrating its practice in securities and shareholder litigation. For more information, please feel free to contact any of the attorneys listed below. Attorney advertising. Prior results do not guarantee similar outcomes.

$POS

[$hellKing]

Ive seen some stocks do RSs and then do the same FS later on. I wonder if they can get the chill removed it they go back and FS it. But finally we are getting some info out on all this. Hopefully when the dust clears we will still be able to make some money.

[Zardiw]

Sounds like fertile ground for some Class Action suits.....Covering their naked short asses by just stopping trading?....Brilliant solution huh?........z

[MaxShockeR]

MicroCap Stocks under a Dime Article....



> DTCC - PENSON - Broker situation

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=65851079




MicroCap Stock Crisis and What You Can to Avoid it by TomAllinder on July 17, 2011

Over the last few weeks a lot has happened in the micro cap world. Probably the biggest thing is the fact that one of the largest clearing houses, Penson Financial Services, will no longer clear stocks under a dime.

A few weeks ago, Penson put in place a new policy that essentially paralyzed all stock deposits, clearing and what have you for sub dime stocks. This new policy is across the board meaning no certs, no DWAC, DRS, ACAT or any other method for any stock under a dime.

Obviously this does not affect companies that clear elsewhere… yet. Rumor has it that other big houses will follow suit.

There are two big impacts of this policy…

The first is self explanatory and we have already covered it; no more stocks of any kind under a dime through Penson. The second however is that many of the bigger online trading firms clear through Penson. This means that if a trader or investor who uses one of the big online brokers and they clear through Penson, that trader or investor cannot purchase shares of any stock trading under a dime.

How to get around this?

For the big online trading firms, if they expect to keep all those commissions they earn on the numerous daily trades on the thousands of Pinks and OTCBBs that are under a dime, they are going to have to clear these elsewhere. This may or may not happen and if it does, it will take a while. The only way to buy and sell stocks under a dime is through smaller firms and full service firms. Being that most of the action on these low priced stocks are by traders and especially day traders, that will not work well. Day trading and having to use a phone is like asking a neurosurgeon to do a delicate procedure wearing welding goggles and gloves.

I have spoken to individuals at many of the big Financial firms in NYC over the last several weeks. They are already moving to smaller clearing firms or setting up their own clearing in-house. It might surprise many to know how many big financial firms in the Big Apple deal with small stocks. There is too much money to be made to let the sub dime stocks fall by the wayside.

There is a caveat however… and here is the biggest point I will make in this article:

They will only take stock of companies that are FULLY REPORTING and DTC eligible. They do not care what the price is as long as the company is fully reporting.

In other words, there is a big weeding out underway right now.

Speaking of DTC eligible, those companies that have lost DTC eligibility are going to get weeded out too. Why?

Stocks that are not DTC eligible run a strong risk of having trading of their stock suspended by trading firms because of the expensive administrative nightmare it causes. What makes this even more painful is if the stock suddenly gets good volume. That volume will dry up as trading firms suspend trading in that security.

When a stock is not DTC eligible, all the week’s trades have to be settled through PAPER CERTIFICATES; it is expensive and time consuming and most trading firms do not have adequate resources to handle this especially on high volume stocks. To compound the problem, the traders of that stock receive an unpleasant statement the following month because the costs of the administration of non-DTC eligible stocks are passed on to the people who bought and sold the security. This can amount to several hundred dollars for each trader/investor.

If a stock is DTC eligible all transactions are handled automatically and electronically.

More on DTC eligibility…

One of the best ways to lose DTC eligibility is to register stock in any other form than an S-1. Many Pink Sheet and OTCBB companies are still doing things like 504s which is severely frowned upon by the DTC.

Many companies that have done a reverse split over the last year or so have had their stock “chilled” (non-DTC eligible) by the DTC. The reason they are getting chilled is because right after the reverse split takes place, the company registers more shares (usually through a 504) for sale. This pisses the DTC off and they chill the stock and no matter how many resources the affected company throws at the DTC, they continue to be chilled and the DTC becomes less responsive.

So the conclusion I have drawn is simple:

If you want the stock of your company to keep trading, become a fully reporting company and register new stock the way the DTC wants it done.

While these issues have caused much grief lately, I think for the marketplace overall it is going to be of great benefit to both the surviving companies, investors and traders.

We all know that many if not most of the Pink Sheet and some OTCBB companies out there are nothing more than ATM machines for the management team and their “investors”. Those companies that have no money and no business will be left in “no man’s land”. Those companies that do clean up their act and become transparent will stand a much better chance of succeeding in business and in the marketplace. The pool of investors and traders will remain the same or grow while the companies to select from will be far fewer in number.

There will always be sub dime and sub penny stocks to trade and invest in, there will just be fewer and the companies will be more transparent."

Search DTCC eligible stocks here http://www.dtcc.com/

"Here is an article that folks might find very enlightening. though it is written about the micro-cap market and Reverse Splits in general.

[$hellKing]

I am just happy people are coming out now. I have been telling people this for a LONG TIME. And about all the other avenues they are taking. Now people are starting to feel it. You cant even make ACAT transfers with penny stocks practically any more. If you broker boots you for some reason, you are stuck like chuck. They will tell you that you can get certs. But guess what? Brokers arent taking paper certs anymore bc of counterfeit certs going around. These things can go on and on.

[$hellKing]

We are going to need a lot of phone calls on this. I bet they prob thought that they could pull it off and no one would bitch. They try to sneek these things through on everything in life and mislead the masses.

[brwtrpilot]

Maybe this is the group of folks at the GAO we can contact??
Thoughts?

http://www.gao.gov/about.gao/phonebook/orgphonebook.pdf


Financial Markets Specialists
Timothy C. Mooney.......................................................m 2440-B...........................rm 2A28.........................[phone]
Administrative Operations Assistant
Nada S. Duckett-Parsee................................................rm 2440-B..........................rm 2A30A........................[phone]
Administrative Operations Technicians
Sonya Y. Hockaday.......................................................rm 2440-B...........................rm 2015..........................[phone]

[brwtrpilot]

Hi.. Number 19 bookmark here figure it will grow..
anyway. While I do not hold as of yet problem stocks, I am ticked at the whole deal along with everyone.. This is very fishy to say the least.
This is the Zecco CEO's Blog concerning this issue..
http://pulse.zecco.com/2011/08/the-increasingly-murky-niche-of-penny-stock-trading/
I have yet been able to contact legal at DTCC but have a call in..
Will post any info I get from them..
I also am planning as soon as I get home in a month or so hotfooting it to my States Senators office with all info that I am able to gather on this.. Also I have sent a copy of the Zecco letter / notice to all CEO's of stocks that I trade in to make them aware of what is happening. I think if we are not very proactive on this issue and get answers soon this could very well shut down any otcbb or pink volume...
Really do you want to trade or hold stocks that could according to what we are reading all the sudden get the axe by DTCC.. ??
And one person on the zecco site said they had a stock that was like two bucks that hit the list. and he is stuck.. OMG!!!
I hope to find a new house that has the basic commission structure as Zecco but with out this mess.
If I do find one will post it up..
And if I do end up with a stock that gets on the list and I can't move it I will be glad to join a class action.
There is more to this than meets the eye I am willing to bet..
Anyway good luck folks. .
Pilot

Subnote
Start Reading
http://www.gao.gov/products/GAO-09-318R

[Farmboynate]

people who have brokers that clear with penson and have had problems need to start a class action suit or something and stop this bogus evil stuff they are doing

[Yosako]

So far the $7.50 fee is when it hasn't had TA for 6 years.

[$hellKing]

No TA Penson will charge something like 7.50 a month every month that you hold it. Or they will delete it from your account(they say they will put it back if they do get a TA). Other brokers arent doing this yet that I know of. Its coming from DTC I believe bc of all the counterfeit shares and naked shorting perhaps.

[Yosako]

I already started, pulled nearly all the dough leaving only the GPGD shares + $30 for commissions and so.

BTW: What are the implications of a stock having no Transfer Agent?

[$hellKing]

I wouldnt use a broker with Penson.imo People should start their exodus now.

[Yosako]

GPGD shows up as non-DTC eligible in the most recent Zecco list from Penson; I ask Scottrade via Twitter (a non-Penson broker) and they told me GPGD is DTC eligible.

Penson is coming with a load of BS to charge outrageous fees in whatever they don't want to trade.

[StockPrez]

I'm in GRPS, and this stock will only be on a trade by trade basis from now on because of action from the DTCC. Does anyone here know what that means? Thanks.

[JA9791]

Can anyone help?

having trouble identifying if these are the same stock:

From zecco DTCC Non-Transferable list:
"GLGTXX 39536R101"
"SNMNZZ 78461L994"


I am holding GLGT and SNMN. Am SOL lol?

[$hellKing]

Its probably not a non DTC stock. I think they are labeling stocks with "no TA" as non DTC now. Good luck with ACATing. Most online borkers are not allowing penny stock account transfers. They have their own discretion for it. Its going to be brokerwide with the Non TA stocks and the lower tier stocks being blocked soon.

[Yosako]

I'm on the same boat...question is if we can actually move the shares between brokers without being hit with extra fees.

[derrickno1]

Farmboynate, it´s terrible what´s happened to you. I would like to help, and my first advice is that you should get rid of Zecco, which is becoming the worst and least reliable broker for subpennies. I have read about similar cases like yours involving Zecco! I totally agree that it is a criminal action and I wish we had the means to stop those brokers playing foul.

Like I said on other posts, according to what I have seen on many boards, I think this non-DTC issue is mainly linked to pink sheets, not to OTC stocks.

I use Sogo and I think that´s the best solution to trade subpennies. No, I am not pumping them to get some free trades, just telling you what I think. With Sogo you don´t have access to pink sheets, only to OTC stocks. But OTC stocks are more regulated than pinks,and less prone to non-DTC issues. Besides, Sogo PREVENTS you from buying them if there´s such an issue like the non-DTC thing. It happened to me with EVCA. You can see my post about it some days ago. I tried to buy EVCA, and the platform simply kept rejecting the order to BUY. Big difference than what happened to you.

During some months I basically traded OTC subpennies and I am now convinced that they are the safest play, safest than stocks above 1$, IF you play them well. For example, the market was a bloodbath for stocks above 1$ during the last market downtrend. But not for subpennies.

It´s not so difficult: you just need to choose specially those stocks between $0.0018 and 0.004, which are the most volatile. AND you need to buy them on support. YOu enter the trade with 1/3 of your total position, and when you are rather sure that the trade is going well, you can add the rest of the position. You need to select stocks with good average volume, like above 1M.

I have been doing it for 3 or 4 months with OTCBB stocks, and my weekly balances are always gaining. Even when the market was on a steep downtrend, I could keep my weekly gains thanks to these high volatility OTCBB plays. I have to admit that I wasn´t doing very well with stocks over 1$ ( which I sporadically still trade), but OTC trading following those rules has turned out to be much safer and easier.

GLTA!

[Yosako]

Actually what I want is to do whatever is necessary to skip the HUGE non-DTC-eligibility fee on my GPGD shares (GPGD never appeared in previous lists!), that probably can be done by transferring my account to Fidelity. The plan itself is simple: once it's all in the new account, set a sell order on GPGD, wait for news to come, and once it's sold off take the money and run.

I'm tired of this BS, man, I'll stop trading pennies cos I don't want to deal with those electronic witch hunts anymore.

[derrickno1]

Fidelity is very expensive. If you trade subpennies you need to buy 3 or more times into each position and sell twice, to be successful. You need the cheapest commissions you can find...

ON high volatility plays you can´t go all at once and buy just once into your positions. YOu can easily expect 100% jumps, but also you have to be prepared for the 50% drops. YOu need to add more than once.

[Yosako]

Fidelity seems like an option...

[Yosako]

My current monster pick GPGD has been added to Zecco's non-DTC list (funny it's NOT a shell and never was). Now that selling the stock is out of question I'm considering getting both the money and the shares out of the account aka ACAT transfer to Etrade or another non-Penson broker that skips the BS.

[BDEZ]

agreed!

[Farmboynate]

its totally not right them restricting shares you bought then telling you it will cost more then you paid for them to sell them I own one I know I can't trade with zecco now not sure if I can transfer it out either pretty ticked off as I wanted to sell but couldn't and now the stock has dropped 60% they didn't tell me I couldn't trade it either i just read on a post on another board and I emailed them and they told me if I wanted to it would cost 200-700 dollars
criminal!!!
zecco has gone from the best penny stock broker to the worst in less then 6 months....

[derrickno1]

Hi

That´s a rather obscure issue I think and there´s a lot of missinformation. I agree with you. I think that basically it´s a fraud. It would be great if we could prove it. I think the first step is to come here and share information.

Cheers!

[Yosako]

Did you say TRANSFER? Can't you send them to another account? In that case it's outright fraud!.

[derrickno1]

Fortunately, they wouldn´t allow me to buy it. The platform itself kept canceling the order.

[derrickno1]

EVCA deemed non-DTC eligible by SogoTrade.

[derrickno1]

Thanks for the info,TMc! It´s certainly an issue, indeed. There´s a lot of misinformation about this, unfortunately. For that reason, sharing our own experiences is very important.Has it happened to you with pink sheets only or also with OTC? The real problem is when they won´t let you sell or transfer, which has happened to some Zecco users, according to the Zecco message board. What any honest broker should do is not to let you buy the problematic stocks. As a rule of thumb, I choose OTCBB stocks with good average volume and some kind of history in the market, say more than 3 years trading at least.

Cheers!

InvestBaby

[TMcNasty]

Add $PUNK to the problem child list. Interactive Brokers wouldn't allow me to buy this Friday. Also Thinkorswim (which is currently transitioning away from Penson to merge fully with TDAmeritrade) would not allow me to buy this Friday. Guys I know used Speedtrader and TDAmeritrade without a problem. What's odd is IB self-clears so it's not just a Penson problem. On IB chat the guy said you can't even call IB to have them execute manually. If it's not DTCC eligible you can on only close positions you might already have open.

[derrickno1]

Hi.
What´s the stock you had trouble with? Like I said, I use Sogo, which also clears through Penson, and just once I couldn´t buy a stock for DTCC reasons. I don´t trade pinks because they are not available with Sogo. I think the problem is fishy, like you say, and the rules are not clear and you can have ugly surprises at any time. That´s why I think that the safest is OTC, not pinks. You still have that wonderful volatility, but the market is more "legal". Also, I have read many bad things about Zecco and the DTCC subject. I think it´s very important that you can trust your broker about this. I think Sogo is more trustable than Zecco in that matter at least.

Good luck!

[Farmboynate]

I use zecco and trade otcbb and pinksheets and currently have at least 1 stock I can no longer trade even though it isn't on the list zecco just decided not to allow trading of it really fishy if you ask me i think a lot of illegal stuff with penson is going on and they cut off people able to buy or sell once they have short sold the heck out of some of these stocks also was reading somewhere about penson going to stop allowing most stocks under .10 cents

[derrickno1]

Name your broker and say if it was Pink Sheets or OTC.

This issue seems rather complicated, but it would be interesting if you could tell exactly what broker are you using when you tell about your DTC problem. I think the issue is VERY related to certain brokers. I have heard really scary tales about Zecco. I haven´t had any trouble with SogoTrade, and I heavily trade subpennies. Maybe, I didn´t have any trouble exactly because I trade only OTCBB stocks, because Sogo doesn´t offer pink sheets. Maybe that´s the key, because I have seen the non DTC list and they all seem to be pink sheets. In any case, Sogo seems to be a very good option, because the trades are cheaper than for any other broker....

[derrickno1]

Very worried about this issue!! Hi everyone! I have just today learned about this subject. I use Sogo, which clears through Penson, and have never had a problem selling any OTC stock. But only OTC, because Sogo doesn´t trade pink sheets.

Is this DTC chill issue only happening to pink sheets? I think the trouble might be only for pink sheets, because OTC are regulated unlike pink sheets.

[MaxShockeR]

Penson Discontinues Execution for Certain Non-DTCC Eligible Securities

Effective May 2, 2011, Penson Financial Services, Inc. ("Penson") (the clearing agent for Trading Direct) will discontinue execution through the managed (mngd) route for certain Non-DTCC eligible securities due to increasing pass-through costs. (The effected stocks are primarily all pink sheet stocks).

For various reasons, certain securities cannot be made DTCC-eligible or have had their eligibility revoked, usually due to operating or financial issues with the underlying company. As a result, the clearing of these physical positions can carry significant pass-through charges to settle the trade. Trades routinely carry with them the following pass-through charges: Execution Fee-$7.50, DTC Fee-$80.00, Deposit Fee-$75.00, and a New York Window Fee of $34.00. Additional pass-through fees from Transfer Agents ranging from $25.00 to $500.00 can also be associated with these securities that would increase the cost Penson passes through for clearing and execution. Please note that trades executed outside of Penson's MNGD'd route will also be subject to these fees for the clearance of these trades.

We intend to discontinue execution for the securities on the attached list (on a best-efforts basis). As Penson identifies additional securities that are Non-DTCC-eligible, they will bed added to the list and they will not be able to be traded through the MNGD route.

As more detailed information is made available from Penson regarding fee information for the effected securities, this memo and subsuquent stock list will be updated accordingly.

View the Non-DTCC eligible stock list {pdf,154kb}

If you require additional information

For various reasons, certain securities cannot be made DTCC-eligible or have had their eligibility revoked, usually due to operating or financial issues with the underlying company. As a result, the clearing of these positions can carry significant pass-through charges to settle the trade. Trades in these securities may carry with them some or all of the following pass-through charges: Execution Fee-$7.50, DTC Fee-$80.00, Deposit Fee-$75.00, and a New York Window Fee of $34.00. Additional pass-through fees from Transfer Agents ranging from $25.00 to $500.00 can also be associated with these securities.

These fees are almost exclusively associated with OTC Bulletin Board and Pink Sheet stocks, and should not appear on settlement for any Listed or Nasdaq trades. These fees are initiated by the Depository Trust & Clearing Corporation (http://www.dtcc.com/), as well as various transfer agents, and are applied industry wide.

Search DTCC & Non-DTCC Eligible Stocks here

[gail]

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=62791658

[gail]

how did you get this list? i went to their web site and its very complicated. i just want an updated list like what you have there..

[gabkok]

Hello, everyone: I have a couple of positions that were removed from my account by E*Trade under non-transferable securities certificate program.

Can I take tax writeoff for the positions as worthless stock?

[Reeftanker]

wow... but what I really mean is "WOW". Thanks much for the links and info.
I guess we need more overseers to rule the overseers, or less.

[jmbar2]

Apparently they are not required to say why. I did a bunch of research on it on Monday and here are the best resources:

From a conference of DTCC personnel (see page 6)

GLOBAL LOCK ISSUES
When an issue is designated as global
lock at DTCC it is not eligible for
delivery, transfer or withdrawal. There
is a variety of reasons for global lock
designation but the incidents of greatest
impact and hardest cases to resolve
involve allegations of fraud at an
issuer or agent or some other type of
irregularity that makes the validity of
deposited certificates suspect. While
these restrictions on position movement
are understandable given the underlying
problems with the issuer, a set of
other problems spring forth that the
committee addressed to DTCC.

...continued...

http://www.sifmasos.org/attachments/contentmanagers/72/SOD_NewsView%20spring%202007.pdf


http://www.dtcc.com/downloads/products/learning/Deposits.pdf


http://www.let-bcit-trade.com/

http://www.cato.org/pubs/regulation/regv31n1/v31n1-7.pdf

Good luck and let me know if you learn anything else.

[Reeftanker]

DTC recently put a "globel lock" on SMPP, is there anyway to find out why?

[jmbar2]

I didn't get a notice - I just bought it a couple of days ago on the runup. I am a fairly new investor and my position was rather small so I only lost about $150. However, I am concerned that this is outright fraud to sell stock supposedly for a reputable company, when it is actually not that company.

Who was behind this? Where did the money go?

[Stock]

What kind of email or notice did you get from your broker/dealer? Did they call you or what?

They let you buy it...are they not going to let you close your position? Is that the problem? Or are they threatening to remove the position from your account? I presume the issue is that the stock is not DTCC eligible (no electronic settlement of trades)?

And yes, all kinds of stocks trade that have no assets behind them. In this case, the bankrupt company had all of their assets swept away by the new company -- leaving this empty, bankrupt, worthless stock behind... with all of its old liabilities.

There is a new company, doing business by a similar name, but none of the company's assets are within KELLQ.

I hope your position was not too large.

http://www.otcmarkets.com/stock/KELLQ/company-info

[jmbar2]

Need advice. Bought KELLQ on a run earlier in the week only to discover that it is apparently a dead stock - shows up on one of the Penson lists.

I've never experienced this before. Is there any way to save this trade? How can they continue selling stock if there isn't a viable company behind it?