September 17, 2015

The SEC settled charges brought against four former officials of clearing firm Penson Financial Services.  The SEC investigation found that Penson’s publicly-traded holding company, Penson Worldwide, provided customers nearly $100 million in margin loans secured by risky, unrated municipal bonds which became impaired during the financial crisis.  Instead of liquidating the collateral, accounting for its losses, and disclosing the situation to investors, Penson extended more loans to these customers in violation of federal margin regulations.  The eventual accounting and disclosure of the resulting $60 million in loan losses contributed to Penson’s bankruptcy in 2013.  The four Penson officials collectively agreed to pay $175,000 in penalties.  SEC

Tagged in: Misrepresentations, Securities Fraud,