Replies to post #137366 on The Day Shorters Room

[harbs]

it sure seems strange that they just shut down 2,000 accounts..

i'm not much of a business man, but would think they would be more wise to have sent out an e-mail to all the brokerages under them detailing the issues with pinks etc and advising them to advise their clients (us) not to trade pinks or whatever..or they will be shut out..

but just closing accounts on no notice and stopping all that revenue coming through from listed stocks everything else..well..weird

[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.

[andrius]

we'll see.... my broker been telling me for over a year that penson is getting weird with otc/pink flow and I didn't believe it. which led me to contacting them directly and I spend weeks going bakc and forth with their compliance.

yeah they used to allow trading in crazy stuff, handing out shares after splits early before delivery, add in their own added route, etc. its finally catching up to them and this time its not only that they don't want the risk of pink flow, regulators are forcing them to...

hate or love penson they provided a service no-one else wanted to and the good days are over. its not going to happen overnight but they'll phase it out and leave pink biz for good.