Penson Worldwide has transferred the correspondent and customer accounts of Penson’s U.S. broker-dealer subsidiary, Penson Financial Services to Apex Clearing Corporation in exchange for an approximately 94% ownership interest in the parent company of Apex Clearing.
Apex Clearing will begin operations on June 6 and will provide clearing, execution and settlement services to approximately 230 U.S. based securities correspondents and one million customer accounts. Penson and Chicago-headquartered financial services company PEAK6 Investments formally unveiled Apex Clearing last week. The transfer of accounts and contracts agreement does not include Penson’s Futures or Canadian Operations.
Michael Chochon has joined Apex Clearing’s initial management team as chief financial officer. Chochon resigned as executive vice president and CFO of Penson Worldwide and PFSI effective as of the closing, and he has been replaced by Bart McCain, previously chief administrative officer of PFSI, who will serve as interim CFO of both Penson Worldwide and PFSI.
The formation of Apex Clearing follows a restructuring by Penson in order reduce costs and debt and revive the companys profitability. Over the last six months, the company shut doors on its unprofitable UK business and a combined its U.S broker-dealer arm and US futures business with the aim of making more efficient use of capital. The company also sold its Australian subsidiary to Pershing last year. The company said the latest transfer of accounts brings much needed stability to customers and the capital markets. The completion of the transaction is expected to allow customers to continue to conduct their brokerage business as usual, it added.
PEAK6 will provide capital, the management team, day-to-day operational oversight, and risk management discipline necessary to run the business. Danny Rosenthal, a senior partner at PEAK6, will be Chief Executive Officer of Apex Clearing. PFSI will initially provide transitional services and retain a majority economic interest in Apex Clearing. Broadridge Financial Solutions and Apex Clearing are putting a new agreement in place for Broadridge to provide the securities processing technology platform and back office services for Apex Clearing which Broadridge currently provides to support Penson’s correspondents.
“This transaction resolves an urgent need in the marketplace today to maintain stability and continuity for Apex Clearing’s customers,” said Brad Goldberg, president of PEAK6. “PEAK6 brings a focus on strong management, sophisticated technology platforms, and a disciplined approach to risk which will provide stability for customers.”
(JDC)