muses of the moment

May 3, 2012

Alert-Penson Worldwide

Filed under: MF Global bankruptcy — totallygroovygirlfriday @ 6:30 pm

Ann Bardhardt, who is very familiar with the MF Global crime scene and commodity broker business, has issued a warning on another possible MF Global situation. (h/t sw)

Click here.

Very important! Groovygirl has not researched this, she is just passing information along, you must do your own due diligence. PNSN has had a number of problems the past year. But March 2012 seems to have taken a turn, that is when they also issued an “all is well, we are not MF Global” press release. Always a red flag when the stock is tanking.

Ann’s post (published yesterday):

If you are foolish enough to still be in the markets and you are doing business with anyone who clears through Penson Worldwide, you need to get out of there.

The stock symbol is PNSN. Just google that and look at the chart. $31.50 high, now trading at $0.49, making new lows daily.

In case you didn’t know, I was clearing through Penson when I closed my firm last November. I was blessed in that all of my back office stuff was handled by a lovely little boutique office in Wisconsin that handled IBs like me, that had just been acquired by Penson before I came on board. I never spoke to Chicago or New York, just a merry band of Wisconsinites who were always wonderful to work with. I was truly blessed in that. (The cattle and feeder futures paper that I did in the pit, as opposed to the electronic, which was less and less over the years as the electronic markets grew and grew, was actually all done as give-ups by the FC Stone meat desk. Shout out to Larry and the Stooges, who still call to chat every so often, and have a photo of me with my pink AR-15 hanging in their desk. Good people.) But, the Penson ship is going down, it appears.

They were in trouble last year when MF Global happened and were looking to dump their European divisions, and they did bounce a bit after MF Global when they unloaded their Aussie holdings, but it looks like it is all but over for them. The stock is cratering, and there is chatter on the net that they are taking forever to get cash withdrawls out, posted and cleared. That’s a very bad sign. MF global was the same way in the weeks before the end.

The extreme danger is that the CME is going to do with Penson what they did with MF Global and NOT backstop and keep customers liquid when the end comes. MF Global proved that the CME is no longer going to fulfill its fiduciary duty and will screw clients twelve ways from Sunday without hesitation. DO NOT get caught up in that crap. Just get out of the whole, stinking, festering, putrefied mess. Get out of the markets ENTIRELY.

Here is a six month chart on PNSN, which is basically the timeframe since MF Global. Once it broke back under $1.00 in March, it has been Katy-bar-the-door. Strong support at zero. Ugh.

Update: since gg is not a broker, here are some brokers discussing Penson back in March 2012. A few things: one brokers says Penson is “safe” because they don’t have a prop desk. But, just before that, another commentor claims they have huge cash flow/losses from a large client loss. So, are your funds segregated from the “large customer” loss? Will you be liquid and able to trade/get out of trades? Remember, MF Global went into the weekend fine, and declared bankruptcy on the following Monday.

1 Comment »

  1. […] when groovygirl mentioned this news item and Ann Barnhardt’s warning about Penson? Click here for the […]

    Pingback by The Knight Capital-Penson Connection « muses of the moment — August 2, 2012 @ 10:17 pm

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