Replies to post #93 on Worthless Securities DTCC Non-Transferable list (PENSON)

[Yosako]

I've gathered a few points which expose that Penson's behavior could actually be considered ILLEGAL.
It started with their recent penny stock policy change caused by NSCC illiquid requirement.

Potential Buy-In Following Sales Triggering the NSCC Illiquid Requirement

The National Securities Clearing Corporation (NSCC) is a subsidiary of DTC which provides clearing, settlement, risk management, central counterparty services and a guarantee of completion for certain transactions for virtually all broker-to-broker trades involving equities, corporate and municipal debt, exchange-traded funds, and other securities. The NSCC Illiquid Requirement is applied to Penson when one customer (or more than one customer in the aggregate, across the totality of customers of Penson’s correspondents ) whose account is carried by Penson sell more than 25% of the average daily trading volume of a security over the last rolling 20 business days.
The amount of this requirement depends on
the percentage of the ADV (Average Daily Value) represented by the open sales. The requirement has very little relation to the value of the trade, and is generally at least ten times the trade value and may be as high as one hundred times the trade value, or even more. This requirement is incurred even if the
customer owns the shares and even when Penson has these shares long in its DTC account.
If Penson’s customer(s) create a NSCC Illiquid Charge greater than $50,000, the offending trade or trades will be bought in on T+1, without notice to the customer.
If a customer creates a second NSCC Illiquid Charge greater than $50,000 in a ninety day period, in addition to the buy-in, the customer account may be subject to closure for ninety days.

1) Zecco's reaction to Penson's policy has been to restrict the maximum order size allowed down to 25% (now 10%) of 20-day Average Daily Volume. By adopting such measure, the volume of sub-$1 stocks can be indirectly MANIPULATED DOWN TO OBLIVION. It would only take either of two cases (which can also happen simultaneously):
- When a penny stock's active traders hold their shares on Penson-clearing brokers.
- When a penny stock has days or weeks of little or no activity (extremely typical on the OTCQB and Pink Sheets).

The order size restriction to a maximum 10% 20-day ADV inevitably causes tradeable order sizes to shrink every day with a strong possibility of becoming even zero.
2) Although thinking it well, it's a nice way for Penson and its related brokerages to rake up EXCESSIVE COMMISSIONS by requiring traders to place orders over multiple days to liquidate a position.

3) At last, one could say that the case of a share buy-back where shares you've recently sold are put back into your account by the clearing firm because-they-say-so can be a form of UNAUTHORIZED TRADING.

What do you think? What could I do with such info?