To understand the Penson/Apex story, we need to go back almost three years.? In May 2011, Penson Worldwide Inc. disclosed in its 10-Q that it was carrying collaberal of $42 million in illiquid bonds issued by an entity that controlled the Retama Park racetrack as collateral from a number of customers. The filing reported, ?It is possible that the value of the collateral? might be impaired, resulting in a write-down of a portion of these receivables that could be material in amount.?? At that time, Penson was the second-largest clearing firm in the country, as measured by the number of clients ? 437.
In May 2012, Penson?s quarterly report to the SEC said that it was, ?pursuing a number of “strategic restructuring initiatives” to improve its financial liquidity and increase its regulatory capital.?? Just a few weeks later, Penson announced that it was transferring much of its business to Apex Clearing, a new outfit that Penson created with Peak6 Investments, the parent of electronic broker OptionsHouse.
This presented an issue for some brokers who previously cleared through Penson.? What would happen if OptionsHouse was able to poach customers, given the new entity, and by extension OptionsHouse, had access to sensitive customer data?
More controversial still was Apex?s new deposit plan for brokers. It developed a formula asking firms to increase their deposits based on the types of trades that they handle. Smaller brokers complained they are being asked to put up as much as 5 to 10 times more than previously.? Penson?s loose capital requirements were a draw for these firms, as it was not necessary to tie up their capital to generate commission revenue.?
While the story isn?t over yet, it?s close.? Earlier this month, Penson filed for Chapter 11 in Delaware.? Penson?s largest unsecured creditors listed in court papers include holders of about $216 million in 12.5 percent senior second lien secured notes due in 2017; holders of about $62.9 million in 8 percent senior convertible notes due in 2014; and Sungard Financial Systems LLC, owed $6.4 million.