Spongetech Delivery Systems, Inc. (fka SPNGQ)

[starfire]

Was SPNG's share structure abused as indicated in the quotes below..........
was Penson involved in such practices....

It depends on whether or not options were illegally used, such as to effect "Reset Transactions," as seen in Sears Holdings.

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171488374#.UfaSzNxtGAQ

Speaking of Sears Holdings, I see a new Form 4 was filed by Eddie Lampert.

http://www.sec.gov/Archives/edgar/data/860585/000118143113038222/xslF345X03/rrd384490.xml

The CBOE and C2 exchanges were charged by the SEC with regulatory failures as the result of the optionsXpress case.

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171575348#.UfaVOdxtGAR

The charge reads, in part, as follows.

"Washington, D.C., June 11, 2013 ? The Securities and Exchange Commission today charged the Chicago Board Options Exchange (CBOE) and an affiliate for various systemic breakdowns in their regulatory and compliance functions as a self-regulatory organization, including a failure to enforce or even fully comprehend rules to prevent abusive short selling."

This could be relevant to SpongeTech because the SEC approved an emergency rule change, designed to allow Apex Clearing a Holding Permit, which was submitted by CBOE and C2.

http://www.sec.gov/rules/sro/edgx/2012/34-67136.pdf

The submission reads, in part, as follows.

"The Exchange is proposing to temporarily suspend the requirements of EDGX Rule 2.6 and related EDGX Rules concerning the approval of new Members in order to admit Apex Clearing Corporation (?Apex Clearing?), f/k/a Ridge Clearing and Outsourcing Solutions, Inc. (?Ridge?), as a Member of EDGX, subject to Apex Clearing complying with the Exchange?s Membership qualification rules within 30 calendar days of the effective date of this filing. The Exchange is also proposing to accept Apex Clearing?s assumption of all of the existing clearing agreements and arrangements currently in effect between Penson Financial Services, Inc. (?PFSI?) and other EDGX Members by execution of a global agreement thereto."

I can't really give this discussion too much more time right now. You'll have to read the case information, and do more research, to get all the information required to understand all the details.

But, from what I see, we have the SEC approving an emergency rule change, to accommodate the CBOE and C2 options exchanges, to provide a permit for Apex, which bought out Penson, who was a major SpongeTech market participant. And then we see the SEC file charges against the CBOE and C2 options exchanges for "... an overall inability to enforce Reg. SHO with an ineffective surveillance program that failed to detect wrongdoing despite numerous red flags that its members were engaged in abusive short selling."

Courtesy: cowtownjay