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Case Status:    SETTLED
On or around 04/11/2014 (Other)

Filing Date: August 23, 2011

According to a press release dated August 23, 2011, the defendants violated federal securities laws when it reported materially misleading information in its public filings.

The complaint alleges that the defendant Company derived a material part of its revenue and income from interest it received on margin loans to customers. In connection with margin lending to customers, the Company's customers pledged collateral, such as securities, in return for such loans. Further, the defendants represented that the Company maintained adequate policies and procedures to manage and monitor credit risk relating to the Company's margin lending.

But, during the Class Period, unknown to investors, the Company concealed from investors that by at least the end of 2010, 1) that the Company had approximately $96-97 million in receivables ("Nonaccrual Receivables") of which approximately $43 million were collateralized by illiquid securities and therefore unlikely to be collected; 2) the Company's assets (Nonaccrual Receivables) were materially overstated and should have been written down at least by the end of 2010; 3) as a result, the Company's reported income and EBITDA (earnings before interest, taxes, depreciation, amortization and stock-based compensation, and excluding certain non-operating expenses) were materially overstated; and 4) the Company's financial statements were not prepared in accordance with generally accepted accounting principles ("GAAP").

On May 9, 2011, the Company filed its quarterly report for the quarter ended March 31,
2011. The Company disclosed, among other things, that with respect to the Nonaccrual Receivable (the Company reported approximately $97.4 million at the end of 2010 and approximately $96.9million at March 31, 2011) approximately $43 million were collateralized by illiquid securities issued by a troubled horse track and real estate project in Texas.

Between May 9 and May 11, 2011, the Company’s shares declined from a close on May 9, 2011 of $5.45 per share to close at $3.93 per share on May 11, 2011, a decline of approximately 28%, on heavy volume. Additionally, on May 12, 2011, shares declined $0.81 per share further, or approximately 21%, to close at $3.12 per share, on heavy volume after a statement by the Company defending its sound financials and announcing the resignation of it directs.

On August 4, 2011, after the close of trading, the Company disclosed that "the Company recorded a non-cash write down of $43.0 million, equal to $26.7 million or ($0.94) per share net of tax, against $96.6 million of nonaccrual receivables. The write down was recorded in conjunction with [the Company’s] initiation of foreclosure proceedings on the majority of the collateral underlying these receivables, including, but not solely related to, certain assets associated with the Retama Development Corporation, and shares of [the Company’s] stock."

Following that announcement, on August 5, 2011, shares declined $0.49 per share or approximately 19% to close at $2.12 per share. Also on August 5, a national ratings agency downgraded the Company. On August 8, 2011, the next trading day, stock declined 9% further to close at $1.92 per share.

On January 19, 2012, the Court issued an Order appointing Lead Plaintiff and approving Lead Plaintiff's selection of Lead Counsel.

On March 23, 2012, Lead Plaintiff filed an Amended Class Action Complaint.

On December 28, 2012, the parties entered into a Stipulation of Settlement.

On January 22, 2013, the Court issued an Order staying this case pending Defendant's bankruptcy case.

On August 23, 2013, the Court issued an Order awarding attorneys' fees and expenses. On the same date, the Court also issued an Order of Final Judgment approving the Settlement and dismissing this case with prejudice.

COMPANY INFORMATION:

Sector: Financial
Industry: Investment Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: PNSN
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. Texas
DOCKET #: 11-CV-02098
JUDGE: Hon.Reed C O'Connor
DATE FILED: 08/23/2011
CLASS PERIOD START: 02/10/2011
CLASS PERIOD END: 08/04/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kaplan Fox & Kilsheimer LLP (SF)
    350 Sansome Street, Suite 400, Kaplan Fox & Kilsheimer LLP (SF), CA 94104
    415-772-4700 415-772-4707 ·
  2. Kaplan Fox & Kilsheimer, LLP (New York)
    850 Third Avenue, 14th Floor, Kaplan Fox & Kilsheimer, LLP (New York), NY 10022
    212.687.1980 212.687.1980 ·
  3. Schneider Wallace Cottrell Brayton Konecky, LLP

    ·
No Document Title Filing Date
COURT: N.D. Texas
DOCKET #: 11-CV-02098
JUDGE: Hon.Reed C O'Connor
DATE FILED: 03/23/2012
CLASS PERIOD START: 03/30/2007
CLASS PERIOD END: 08/04/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Gruber Hurst Johansen Hail Shank LLP
    1445 Ross Ave., Suite 2500, Gruber Hurst Johansen Hail Shank LLP, TX 75202
    214.855.6802 214.855.6808 ·
  2. Kaplan Fox & Kilsheimer, LLP (New York)
    850 Third Avenue, 14th Floor, Kaplan Fox & Kilsheimer, LLP (New York), NY 10022
    212.687.1980 212.687.1980 ·
  3. Schneider Wallace Cottrell Brayton Konecky, LLP

    ·
No Document Title Filing Date