The Day Shorters Room

[DCschmoeka]

I agree. Penson got caught doing funky business in horse betting loans. Who knows what money got laundered thru the horse betting business itself (if you have an idea how those books are run, you will get the picture...). My guess is there's a huge criminal background but the regulators don't have sufficient prove and/or the players are untouchable or out of the country. So the regulators do what they always do in this situation - scrutinize everybody that's involved to the max and punish every little violation they can find. You see that a lot when alleged criminals get sentenced hard for unrelated petty offenses. IF YOU CANT GET THE BANK ROBBER FOR THE ROBBERY - YOU CAN STILL GIVE HIM A $5000 TRAFFIC TICKET, IMPOUND HIS CAR AND TAKE HIS DRIVER's LICENCE. Something gotta give....

In penson's case, they upped the margin req's for under .10 stocks, so Penson has to close these accounts just to stay open and meet the new regulatory requirements. Take away a profitable biz cause you cannot punish them directly.