##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED
    DECEMBER 31, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   001-32878
    (Commission File Number)
      PENSON WORLDWIDE,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

6211

75-2896356(State or Other Jurisdiction
    of
    Incorporation or Organization)

(Primary Standard Industrial
    Classification Code Number)

(I.R.S. Employer
    Identification No.)   1700 Pacific Avenue, Suite 1400
 Dallas, Texas 75201
 (214) 765-1100
 (Address, including zip code,
    and telephone number, including area code, of the
    registrants principal executive offices)
  Securities registered pursuant to Section 12(b) of the
    Act
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value $0.01 per share

NASDAQ Global Select Market   Securities registered pursuant to Section 12(g) of the
    Act
    None
  o þ
  o þ
  Regulation S-T o o
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 





PENSON
    WORLDWIDE, INC.Form 10-K
    For the Fiscal Year Ended December 31, 2009
  TABLE OF CONTENTS
  Basis of Presentation


1Special Note Regarding Forward-Looking
    Statements


1PART I


5Item 1.


Business


5Item 1A.


Risk Factors


24Item 1B.


Unresolved Staff Comments


39Item 2.


Properties


39Item 3.


Legal Proceedings


39Item 4.


Reserved


41PART II


41Item 5.


Market for the Registrants Common
    Equity, Related Stockholder Matters and Issuer Purchases of
    Equity Securities


41Item 6.


Selected Financial Data


44Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


45Item 7A.


Quantitative and Qualitative Disclosure About
    Market Risk


61Item 8.


Financial Statements and Supplementary
    Data


63Item 9.


Changes in and Disagreements with Accountants
    on Accounting and Financial Disclosure


63Item 9A.


Controls and Procedures


63Item 9B.


Other Information


64PART III


64Item 10.


Directors, Executive Officers of the
    Registrant and Corporate Governance


64Item 11.


Executive Compensation


64Item 12.


Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters


65Item 13.


Certain Relationships and Related
    Transactions, and Director Independence


65Item 14.


Principal Accounting Fees and Services


65PART IV


65Item 15.


Exhibits and Financial Statement
    Schedules


65Signatures


67EX-2.4EX-10.34EX-10.35EX-10.36EX-12.1EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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Basis of
    Presentation  Form 10-K,
       Special
    Note Regarding Forward-Looking Statements    
    interest rate fluctuations;
    general economic conditions and the effect of economic
    conditions on consumer confidence;
    reduced margin loan balances maintained by our customers;
    fluctuations in overall market trading volume;
    our ability to successfully implement new product offerings;
    our ability to obtain future credit on favorable terms;
    reductions in per transaction clearing fees;
    legislative and regulatory changes;
    monetary and fiscal policy changes and other actions by the
    Board of Governors of the Federal Reserve System (Federal
    Reserve); 1




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
    our ability to attract and retain customers and key
    personnel; and
    those risks detailed from time to time in our press releases and
    periodic filings with the SEC.   2




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Glossary
    of selected terms
  Algorithmic traders
  Algorithmic trading
  ASP
  Back-end trading software
  CFD or Contract for Difference
  Clearing
  Clearing firm and/or
  Client
  Correspondent and/or and/or and/or
  Custody
  Customers
  Direct access Direct market
    access
  Electronic Communications Network ECN
  Execution routing
  FCM
 3




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##### Table of Contents



Front-end trading software
  Level I market information
  Level I trading software
  Level II market information
  Level II trading software
  Online trading
  Settlement
 4




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PART I  Item 1.
    Business  Overview
               5




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Managements Discussion and Analysis of Financial
    Condition and Results of Operations
    Clients
  non-U.S. entities
    Industry
    trends
    Shift to outsourced solutions.
  Increase in trading in multiple
    markets.
 6




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Industry consolidation.
  Demand for increased reporting capabilities and integrated
    technology solutions.
  Opportunities in the Canadian, European, Asian and Australian
    markets. including
  Our
    product offering
  Clearing
    and related services
       7




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Technology
    and data products
    Our
    competitive strengths
  Established
    market position as the largest independent provider of
    correspondent clearing services in our primary
    markets.
    Fully-integrated
    securities-processing and technology solutions.
    Flexible
    services and infrastructure.
    Highly
    attractive and diversified client base.
   8




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Scalable,
    recurring revenue model.
    Proven
    and highly motivated management team.
    Business
    strategies
  Leverage
    existing platform to expand our product offerings and client
    base.
    
    Focusing on high-volume direct access and online
    broker-dealers and the futures trading
    industry.We will continue to target our clearing
    services to the growing futures trading, direct access and
    online broker-dealer markets and on margin lending as a core
    complementary service.
    Further expanding our client base in the institutional and
    retail brokerage markets.We are expanding our
    focus on the traditional institutional and retail brokerage
    industry. Many institutional and retail brokers in the
    U.S. have outsourced their clearing functions, and we
    believe this trend is now increasing internationally, which
    creates opportunities for us globally. We are also targeting
    these firms for our technology products and services, which may
    increase if we are able to successfully consummate the
    Broadridge transaction. See Business  Strategic
    Acquisitions for a description of the Broadridge
    acquisition.
    Expanding our client base in the quantitative trading
    sector.Our technology products enable us to
    increasingly market our services to the rapidly growing
    quantitative trading sector. This sector is among the most
    significant drivers of growth in the overall securities markets
    and we intend to increase our focus on these clients.
    Expanding our futures business.  Our purchase
    of GHCO in February, 2007 was a significant step in expanding
    our futures clearing operations and our purchase of FCG in
    November, 2007 gives us the ability to expand our futures
    offering to clients that need risk management and other services.
    Expand offering of portfolio
    margining.  Portfolio margining allows us to
    extend margin lending to cover a higher percentage of the
    purchase price of securities than the percentage required under
    Regulation T based on a risk calculation model approved by
    the SEC. We approve our correspondents internally for portfolio
    margining based on several factors including account size, net
    capital, regulatory background and margin experience. At
    December 31, 2009, we had 613 portfolio margining accounts
    with a weighted average balance of approximately
    $110.0 million in the fourth quarter of 2009.
    Expand offering of foreign exchange
    products.  In 2009, we launched our foreign
    exchange product, which provides our customers a focused
    traditional and technology-based center of competency in both
    deliverable 9




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and non-deliverable foreign exchange. Our foreign exchange
    product is traditionally used by correspondents to facilitate
    international transactions in equities and bonds. These services
    can be accessed through direct contact with our foreign exchange
    department or through our electronic trading platform.  Expanding
    our operations internationally.
  non-U.S. markets U.S.-based
  Enhance
    revenue potential of each client relationship.
    Capitalize
    on industry trends.
    Pursue
    accretive acquisitions.
    Securities
    processing
   10




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Clearing
    and related operations
  United
    States
        Canada
  and/or
    United
    Kingdom
   11




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Asia
    Australia
    Internet
    account portfolio information services
    Holding
    and safeguarding securities and cash deposits
    Securities
    borrowing and lending
    Proprietary
    trading
    Futures
    products
   12




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Technology
    and data products
              Institutional
    and active retail front-end trading software
     13




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Global
    execution infrastructure
    Global
    data products
  tick-by-tick simple-to-use
    Key
    licensed technology and proprietary customization
    
    see critical information in real-time on a continuously updated
    basis;
    manage their buying power across different accounts containing
    diverse instruments such as equities, options and futures, and;
    receive highly customized reports relating to their activity. 14




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non-U.S. customers, non-U.S. affiliates
  Sales and
    marketing
          Strategic
    acquisitions
  Section 1-02(w) Regulation S-X.
   15




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90-day
          90-day
     16




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Competition
       17




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Intellectual
    property and other proprietary rights
      Government
    regulation
    cease-and-desist
 18




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Regulation
    of clearing activities
    Regulation
    of securities lending and borrowing
     19




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Rules 8c-1
      bona-fide
 20




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Regulation
    of internet activities
    Regulatory
    capital requirements
      30-day
     21




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on-site
     22




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Margin
    risk management
        Local
    regulations
    Employees
     23




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Public
    reporting
  Form 10-K, Form 10-Q, Form 8-K,
  Item 1A.
    Risk
    Factors  Many factors could have an effect on PWIs financial
    condition, cash flows and results of operations. We are subject
    to various risks resulting from changing economic,
    environmental, political, industry, business and financial
    conditions. The principal factors are described below.
  Risks
    related to our business and our industry
  We
    face substantial competition from other securities and
    commodities processing and infrastructure firms, which could
    harm our financial performance and reduce our market
    share.
      We
    depend on a limited number of clients for a significant portion
    of our clearing revenues.
  30-day
 24




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Our
    clearing operations could expose us to legal liability for
    errors in performing clearing functions and improper activities
    of our correspondents.
      Continuing
    low, short-term interest rates have negatively impacted the
    profitability of our margin lending business.
      Our
    margin lending business subjects us to credit risks and if we
    are unable to liquidate an investors securities when the
    margin collateral becomes insufficient, the profitability of our
    business may suffer.
    
    the pledged securities may not be actively traded; 25




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
    there may be an undue concentration of securities
    pledged; or
    an order to stop transfer by the issuer of securities may be
    issued with regard to pledged securities.    We
    rely, in part, on third parties to provide and support the
    software and systems we use to provide our services. Any
    interruption or cessation of service by these third parties
    could harm our business.
     26




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Our
    anticipated transition of certain support services to Ridge and
    Broadridge may involve unforeseen delays, costs or technological
    complications. If we are unable to transition our services
    efficiently to Broadridge, we may experience interruptions or
    difficulties with respect to the services Broadridge is expected
    to provide.
    Our
    products and services, and the products and services provided to
    us by third parties, may infringe upon intellectual property
    rights of third parties, and any infringement claims could
    require us to incur substantial costs, distract our management
    or prevent us from conducting our business.
    We may
    not be able to protect our intellectual property rights against
    unauthorized use and infringement by third parties, and our
    failure to do so may weaken our competitive position, and any
    legal claim we seek to pursue may require us to incur
    substantial cost and distract management and us from conducting
    our business.
    If our
    clients account information is misappropriated, we may be
    held liable or suffer harm to our reputation.
   27




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We may
    be subject to material litigation proceedings that could cause
    us significant reputational harm and financial
    loss.
  time-to-time
    Any
    slowdown or failure of our computer or communications systems
    could subject us to liability for losses suffered by our clients
    or their customers.
    
    computer viruses or undetected errors in our internal software
    programs or computer systems;
    inability to rapidly monitor all intraday trading activity;
    inability to effectively resolve any errors in our internal
    software programs or computer systems once they are detected;
    heavy stress placed on our systems during peak trading
    times; or
    power or telecommunications failure, fire, tornado or any other
    natural disaster.   28




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If our
    operational systems and infrastructure fail to keep pace with
    our anticipated growth, we may experience operating
    inefficiencies, client dissatisfaction and lost revenue
    opportunities.
      
    to improve our systems for operations, financial controls, and
    communication and information management;
    to refine our compliance procedures and enhance our compliance
    oversight; and
    to recruit, train, manage and retain our employees.    A
    failure in the operational systems of third parties could
    significantly disrupt our business and cause
    losses.
    If we
    are unable to respond to the demands of our existing and new
    clients, our ability to reach our revenue goals or maintain our
    profitability could be diminished.
   29




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Our
    existing correspondents may choose to perform their own clearing
    services as their operations grow, in which case we would lose
    the revenues generated by such correspondents.
    Our
    ability to sell our services and grow our business could be
    significantly impaired if we lose the services of key
    personnel.
    We may
    face risks associated with potential future acquisitions that
    could reduce our profitability or hinder our ability to
    successfully expand our operations.
    
    diversion of managements time and attention to the
    negotiation of the acquisitions;
    difficulties in assimilating acquired businesses, technologies,
    operations and personnel including, but not limited to, the
    increased trade volume of acquired businesses;
    the need to modify financial and other systems and to add
    management resources;
    assumption of unknown liabilities of the acquired businesses;
    unforeseen difficulties in the acquired operations and
    disruption of our ongoing business;
    dilution to our existing stockholders due to the issuance of
    equity securities that may make it difficult for us to raise
    capital from equity financing in the future;
    possible adverse short-term effects on our cash flows or
    operating results; and
    possible accounting charges due to impairment of goodwill or
    other purchased intangible assets.   30




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Our
    inability to obtain credit on favorable terms could
    significantly restrict our business activities
    Covenants
    in our credit agreement will restrict our business in many
    ways.
      Our
    revenues may decrease due to declines in trading volume, market
    prices, liquidity of securities markets or proprietary trading
    activity.
    
    reduced trading activity;
    illiquid markets;
    declines in the market values of securities carried by our
    customers and correspondents;
    the failure of buyers and sellers of securities to fulfill their
    settlement obligations;
    reduced margin loan balances of investors; and
    increases in claims and litigation.     31




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Continued
    market instability could negatively affect our operations and
    financial condition.
    Our
    significant
    non-U.S.
    operation exposes us to global exchange rate fluctuations that
    could impact our profitability.
      and/or
  The
    growth of electronic trading and our increasing provision of
    direct market access to our correspondents may subject us to
    additional market exposure.
    Requirements
    to close out fails resulting from short sales could increase our
    costs and adversely affect our securities lending
    business.
   32




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General
    economic and political conditions and broad trends in business
    and finance that are beyond our control may contribute to
    reduced levels of activity in the securities markets, which
    could result in lower revenues from our business
    operations.
    
    the availability of short-term and long-term funding and capital;
    the level and volatility of interest rates;
    legislative and regulatory changes;
    currency values and inflation; and
    national, state and local taxation levels affecting securities
    transactions.    Our
    quarterly revenue and operating results are subject to
    significant fluctuations.
    
    changes in the proportion of clearing operations revenues and
    interest income;
    the lengthy sales and integration cycle with new correspondents;
    the gain or loss of business from a correspondent;
    reductions in per-transaction clearing fees; 33




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
    changes in bad debt expense from margin lending as compared to
    historical levels;
    changes in the rates we charge for margin loans, changes in the
    rates we pay for cash deposits we hold on behalf of our
    correspondents and their customers and changes in the rates at
    which we can invest such cash deposits;
    changes in the market price of securities and our ability to
    manage related risks;
    fluctuations in overall market trading volume;
    the relative success
    and/or
    failure of third party clearing competitors, many of which have
    increasingly larger resources than we have as a result of recent
    consolidation in our industry;
    the relative success
    and/or
    failure of third party technology competitors including, without
    limitation, competitors to our Nexa business;
    our ability to manage personnel, overhead and other
    expenses; and
    the amount and timing of capital expenditures.    period-to-period
  Our
    involvement in futures and options markets subjects us to risks
    inherent in conducting business in those markets.
    We may
    not be able to or determine not to hedge our foreign exchange
    risk.
    The
    securities and futures businesses are highly dependent on
    certain market centers that may be targets of
    terrorism.
   34




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Risks
    related to government regulation
  All
    aspects of our business are subject to extensive government
    regulation. If we fail to comply with these regulations, we may
    be subject to disciplinary or other action by regulatory
    organizations, and we could suffer significant reputational and
    financial loss.
    
    sales methods;
    trade practices among broker-dealers and FCMs;
    use and safekeeping of investors funds and securities;
    capital structure;
    margin lending;
    record keeping;
    conduct of directors, officers and employees; and
    supervision of investor accounts.      non-U.S. businesses non-U.S. markets
  The
    regulatory environment in which we operate has experienced
    increasing scrutiny by regulatory authorities in recent years
    and further changes in legislation or regulations may affect our
    ability to conduct our business or reduce our
    profitability.
   35




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If we
    do not maintain the capital levels required by regulations, we
    may be subject to fines, suspension, revocation of registration
    or expulsion by regulatory authorities.
  and/or
         36




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Procedures
    and requirements of the USA PATRIOT Act may expose us to
    significant costs or penalties.
    Risks
    related to our corporate structure
  Our
    discontinued operations expose us to legal and other
    risks.
    Provisions
    in our certificate of incorporation and bylaws and under
    Delaware law may prevent or frustrate a change in control or a
    change in management that stockholders believe is
    desirable.
    
    a classified board of directors;
    limitations on the removal of directors;
    advance notice requirements for stockholder proposals and
    nominations of directors at meetings of our
    stockholders; and
    the inability of stockholders to act by written consent or to
    call special meetings.   37




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Risks
    related to our requirements as a public company
  Our
    stockholders could be harmed if our management and larger
    stockholders use their influence in a manner adverse to other
    stockholders interests.
    The
    price of our common stock may be volatile.
    
    reductions in market prices or volume;
    changes in securities or other government regulations;
    quarterly variations in operating results;
    our technological capabilities to accommodate any future growth
    in our operations or clients;
    announcements of technological innovations, new products,
    services, significant contracts, acquisitions or joint ventures
    by us or our competitors;
    issuance and sales of our securities in financing
    transactions; and
    changes in financial estimates and recommendations by securities
    analysts or our failure to meet or exceed analyst estimates.    Our
    internal control over financial reporting may not be effective
    and our independent registered public accounting firm may not be
    able to provide an attestation report as to their effectiveness,
    which could have a significant and adverse effect on our
    business and reputation.
   38




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties  Description
    of property
    Item 3.
    Legal
    Proceedings  In re Sentinel Management Group, Inc.
    20-23,
 39




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Various Claimants v. Penson Financial Services, Inc., et
    al.
     40




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Item 4.
    Reserved PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market
    information
      Price RangeHigh


Low2009Quarter ended March 31, 2009

$
8.43


$
4.02Quarter ended June 30, 2009

$
12.04


$
6.73Quarter ended September 30, 2009

$
11.74


$
8.37Quarter ended December 31, 2009

$
11.07


$
8.562008Quarter ended March 31, 2008

$
14.26


$
8.15Quarter ended June 30, 2008

$
13.61


$
9.37Quarter ended September 30, 2008

$
19.11


$
10.69Quarter ended December 31, 2008

$
13.48


$
4.98  41




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Holders
    Dividend
    policy
      and/or
  PWIs
    purchases of its equity securities
    Total Number ofShares Purchased as


Maximum Number ofTotal Number





Part of Publicly


Shares that May Yet beof Shares


Average Price


Announced Plans or


Purchased Under the PlansPeriod

Purchased(a)


Paid per Share


Programs


or Programs(b)October


10,036


$
9.70







483,366November


6,031


$
9.49







494,062December


9,056


$
9.08







516,371     (a)
    
    Includes shares withheld to cover tax-withholding requirements
    related to the vesting of restricted stock units issued to
    employees pursuant to the Companys shareholder-approved
    stock incentive plan.(b)
    
    Remaining shares represent the remaining dollar amount
    authorized divided by the average purchase price in the month.  Recent
    sales of unregistered securities
   42




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Stock
    Performance Graph
    Cumulative Total Return to Stockholders
    Penson Worldwide, Inc., NASDAQ Composite Index and NASDAQ
    Financial Stocks Index
    % Return to Stockholders, May 16, 2006 to December 31,
    2009
  Total
    Return Performance
  
     43




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Item 6.
    Selected
    Financial Data    Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Consolidated statement of income data:Net revenues

$
289,881


$
293,170


$
264,725


$
198,189


$
127,907Total expenses(1)


264,045



276,521



222,767



160,611



123,229Income from continuing operations before income taxes


25,836



16,649



41,958



37,578



4,678Income tax expense


9,825



5,993



15,125



13,299



1,951Income from continuing operations


16,011



10,656



26,833



24,279



2,727Income from discontinued operations, net of tax(2)














243



177Net income

$
16,011


$
10,656


$
26,833


$
24,522


$
2,904Earnings per share  basicEarnings per share from continuing operations

$
.63


$
.42


$
1.02


$
1.07


$
0.18Earnings per share from discontinued operations














0.01



0.01Earnings per share

$
.63


$
.42


$
1.02


$
1.08


$
0.19Earnings per share  dilutedEarnings per share from continuing operations

$
.63


$
.42


$
1.00


$
1.05


$
0.16Earnings per share from discontinued operations














0.01



0.01Earnings per share

$
.63


$
.42


$
1.00


$
1.06


$
0.17Weighted average shares outstanding  basic and
    dilutedBasic


25,373



25,217



26,232



22,689



15,185Diluted


25,591



25,416



26,817



23,058



18,300     (1)
    
    Results from 2009, 2008, 2007 and 2006 include
    $5.1 million, $4.5 million, $4.7 million and
    $3.1 million of compensation expense related to accounting
    for share-based payment awards that began January 1, 2006.
    Accordingly, 2009, 2008, 2007 and 2006 results may not be
    comparable to prior periods.(2)
    
    Concurrent with our public offering, we split off certain
    non-core business operations into SAMCO Holdings, a newly formed
    company which gives effect to a capital contribution to SAMCO in
    an amount equal to the difference between the net book value of
    the division to be split off, as of such date, and the value of
    the 1,041,667 shares of our common stock to be exchanged in
    the split off. Except as otherwise indicated, financial
    information presented sets forth the results of operations and
    balance sheet data of the entities split off as discontinued
    operations.  44




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As of December 31,2009


2008


2007


2006


2005(In thousands)Consolidated balance sheet data:Cash and cash equivalents

$
48,643


$
38,825


$
120,923


$
103,054


$
99,506Total assets


7,251,075



5,539,195



7,846,977



4,644,390



3,578,881Notes payable


132,769



75,000



55,000



10,000



52,395Total stockholders equity


298,902



264,467



265,428



211,784



89,952   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis should be read in
    conjunction with Part II, Item 6 Selected
    Financial Data and our audited consolidated financial
    statements and the related notes included elsewhere in this
    annual report on
    Form 10-K.
    This discussion contains forward-looking statements that involve
    risks and uncertainties. Our actual results could differ
    materially from those anticipated in the forward-looking
    statements as a result of certain factors including the risks
    discussed in Item 1A Risk Factors,
    Special Note Regarding Forward-Looking Statements
    and elsewhere in this annual report on
    Form 10-K.
  Market
    and Economic Conditions in 2009
    
    The Federal Reserve maintained its stimulative low interest rate
    policy. For all of 2009, the targeted federal funds rate was set
    at 0.25%. In 2008, the targeted federal funds rate fell from an
    average of 3.22% in the first quarter to an average of 1.06% in
    the fourth quarter, averaging 2.09% for the year.
    After falling 25% from year end 2008, to a low of 6,547 in early
    March 2009, the Dow Jones Industrial Average rebounded 61%, to
    end 2009 at 10,428.
    The VIX, the ticker symbol for the Chicago Board of Options
    Exchange Volatility Index, a popular measure of implied stock
    market volatility, fell fairly steadily. In December 2009, it
    averaged 21, down 60% from 52 in December 2008.
    Short interest declined. The average number of shorted shares of
    New York Stock Exchange listed companies fell 7%, to
    14.5 billion in 2009, from 15.6 billion in 2008.
    Margin debt fell. Aggregate debits in securities margin accounts
    of New York Stock Exchange member organizations declined 30%, to
    $200.4 billion in 2009, from $285.2 billion in 2008.
    There were no major regulatory changes that broadly affected the
    securities industry in 2009. However, government and regulatory
    officials in the U.S. did discuss increased restrictions on
    shorting stocks and sponsored access, and taxing securities
    transactions as well as raising taxes on capital gains.  Market
    and Economic Conditions in 2008
    
    The Federal Reserve lowered the targeted federal funds rate by
    approximately 400 basis points to approximately .25% at
    December 31, 2008 from 4.25% at December 31, 2007.
    The VIX, the ticker symbol for the Chicago Board of Options
    Exchange Volatility Index, a popular measure of implied stock
    market volatility, reached an intraday high of more than 89 in
    October 2008, versus an average of about 19 since 1990.
    In September and October of 2008, the U.S., U.K. and other
    countries implemented a series of temporary and other, more
    lasting restrictions on the short sales of shares of financial
    service companies. 45




---



##### Table of Contents




    New York Stock Exchange short interest, which, as a percentage
    of total shares outstanding at month end, reached a high of 4.86
    in July 2008, an increase of 43% from December 2007, and,
    following the implemented restrictions, declined 26%, to 3.59 in
    December 2008.
    The Dow Jones Industrial Average closed at 8,778 on
    December 31, 2008, having previously reached a low of 7,392
    in November 2008, from a high for the year of 13,338 in January
    2008.
    Consolidated NASDAQ trading volume increased 47%, to 2.3
    trillion shares in 2008, from 1.5 trillion shares in 2007.
    Margin debt on NYSE stocks declined 42%, to $187 billion in
    December 2008, from $323 billion in December 2007.  Overview
        Fiscal
    2009 highlights
  
    We founded PFSA, which began clearing operations in December,
    2009.
    We invested additional customer segregated funds into higher
    yielding FDIC insured bank accounts during 2009 with
    approximately $2.6 billion moved as of December 31,
    2009.
    In June 2009 we issued $60 million of 8.00% convertible
    notes due June 1, 2014.
    In September 2009 we amended our revolving credit facility,
    increasing it to $100 million.
    We cleared more than 101 million option contracts in the
    fourth quarter and 346 million option contracts in 2009,
    both new records.
    On November 2, 2009 we signed a definitive agreement to
    acquire the clearing and execution services business of Ridge
    Clearing & Outsourcing Solutions, Inc.  Acquisition
    of Ridge
   46




---



##### Table of Contents



90-day
  Acquisition
    of FCG
    Acquisition
    of GHCO
    Acquisition
    of Schonfeld
   47




---



##### Table of Contents



Financial
    overview
  Net
    revenues
  Revenues
          Interest
    expense from securities operations
     48




---



##### Table of Contents



Expenses
  Employee
    compensation and benefits
    Other
    operating expenses
      Profitability
    of services provided
   49




---



##### Table of Contents



Results
    of operations
    Year Ended December 312009


2008


2007Revenues:Clearing and commission fees


50
%


51
%


45
%Technology


8
%


8
%


6
%Interest, gross


35
%


57
%


86
%Other revenues


19
%


15
%


16
%Total revenues


112
%


131
%


153
%Interest expense from securities operations


12
%


31
%


53
%Net revenues


100
%


100
%


100
%Expenses:Employee compensation and benefits


39
%


39
%


38
%Floor brokerage exchange and clearance fees


11
%


9
%


9
%Communications and data processing


16
%


13
%


13
%Occupancy and equipment


10
%


10
%


9
%Vendor related asset impairment










4
%Correspondent asset loss






9
%


Other expenses


11
%


13
%


10
%Interest expense on long-term debt


4
%


1
%


1
%Total expenses


91
%


94
%


84
%Income before income taxes


9
%


6
%


16
%Provision for income taxes


3
%


2
%


6
%Income before income taxes


6
%


4
%


10
%   Comparison
    of years ended December 31, 2009 and December 31,
    2008
  Overview
     50




---



##### Table of Contents



51




---



##### Table of Contents



%Change


Change fromAmount


Previous Year(In thousands)Revenues:Clearing and commission fees

$
(5,509
)


(3.7
)Technology


1,602



7.2Interest:Interest on asset based balances


(36,723
)


(33.5
)Interest on conduit borrows


(24,410
)


(49.3
)Money market


(4,405
)


(65.5
)Interest, gross


(65,538
)


(39.5
)Other revenue


9,736



21.5Total revenues


(59,709
)


(15.6
)Interest expense:Interest expense on liability based balances


(36,295
)


(70.1
)Interest on conduit loans


(20,125
)


(51.7
)Interest expense from securities operations


(56,420
)


(62.2
)Net revenues


(3,289
)


(1.1
)Expenses:Employee compensation and benefits


(614
)


(0.5
)Floor brokerage, exchange and clearance fees


6,267



24.0Communications and data processing


6,176



15.7Occupancy and equipment


530



1.8Vendor related asset impairment


(3
)


(0.4
)Correspondent asset loss


(26,421
)


(100.0
)Other expenses


(4,901
)


(13.1
)Interest expense on long-term debt


6,490



168.4(12,476
)


(4.5
)Income before income taxes

$
9,187



55.2   Net
    revenues
         52




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##### Table of Contents



Employee
    compensation and benefits
    Floor
    brokerage, exchange and clearance fees
    Communications
    and data processing
    Occupancy
    and equipment
    Vendor
    related asset impairment
  Legal Proceedings,
 53




---



##### Table of Contents



Correspondent
    asset loss
      Other
    expenses
  Legal Proceedings
  Interest
    expense on long-term debt
    Income
    tax expense
    Net
    income
    Comparison
    of years ended December 31, 2008 and December 31,
    2007
  Overview
   54




---



##### Table of Contents



%Change


Change fromAmount


Previous Year(In thousands)Revenues:Clearing and commission fees

$
32,649



27.7Technology


7,000



46.1Interest:Interest on asset based balances


(43,344
)


(28.3
)Interest on conduit borrows


(19,378
)


(28.1
)Money market


2



Interest, gross


(62,720
)


(27.5
)Other revenue


2,138



4.9Total revenues


(20,933
)


(5.2
)Interest expense:Interest expense on liability based balances


(26,638
)


(34.0
)Interest on conduit loans


(22,740
)


(36.9
)Interest expense from securities operations


(49,378
)


(35.3
)Net revenues


28,445



10.7Expenses:Employee compensation and benefits


11,736



11.5Floor brokerage, exchange and clearance fees


(1,208
)


(4.4
)Communications and data processing


8,496



27.6Occupancy and equipment


5,317



22.6Vendor related asset impairment


(10,034
)


(92.4
)Correspondent asset loss


26,421Other expenses


12,066



47.6Interest expense on long-term debt


960



33.253,754



24.1Income before income taxes

$
(25,309
)


(60.3
)  55




---



##### Table of Contents



Net
    revenues
                Employee
    compensation and benefits
    Floor
    brokerage, exchange and clearance fees
   56




---



##### Table of Contents



Communications
    and data processing
    Occupancy
    and equipment
    Vendor
    related asset impairment
  Legal Proceedings
  Correspondent
    asset loss
  and/or and/or
  Form 10-K,
    Other
    expenses
  Legal Proceedings
  Interest
    expense on long-term debt
    Income
    tax expense
   57




---



##### Table of Contents



Net
    income
    Liquidity
    and capital resources
  Operating Liquidity 
      Capital Resources  Form S-3,
    (Rule 15c3-1), Rule 15c3-1, (Rule 15c3-3).
 58




---



##### Table of Contents



Contractual
    obligations
    Less Than








More ThanContractual Obligations

Total


1 Year


13 Years


45 Years


5 Years(In thousands)Long-term debt obligations and accrued interest(1)

$
150,401


$
90,401


$



$
60,000


$
Capital lease obligations


10,471



6,218



4,253







Operating lease obligations


28,584



5,579



9,701



6,581



6,723Total

$
189,456


$
102,198


$
13,954


$
66,581


$
6,723     (1)
    
    The long-term debt obligations and accrued interest consists of
    our revolving credit facility and accrued interest of $90,001 of
    which the Company may pay down at any time and our
    8.00% Senior Convertible Notes due 2014 and accrued
    interest of $60,400. Only interest accrued at December 31,
    2009 has been included.    Off-balance
    sheet arrangements
      Critical
    accounting policies
    Revenue
    recognition
   59




---



##### Table of Contents



Revenue Recognition
  Fair
    value
    and/or
  
    Level 1  Inputs are quoted prices in active
    markets for identical assets or liabilities that the Company has
    the ability to access at the measurement date. Assets and
    liabilities utilizing Level 1 inputs include corporate
    equity, U.S. Treasury and money market securities.
    Valuation of these instruments does not require a high degree of
    judgment as the valuations are based on quoted prices in active
    markets that are readily and regularly available.
    Level 2  Inputs other than quoted prices in
    active markets that are either directly or indirectly observable
    as of the measurement date, such as quoted prices for similar
    assets or liabilities; quoted prices in markets that are not
    active; or other inputs that are observable or can be
    corroborated by observable market data for substantially the
    full term of the assets or liabilities. Assets and liabilities
    utilizing Level 2 inputs include certificates of deposit,
    term deposits, corporate debt securities and Canadian government
    obligations. These financial instruments are valued by quoted
    prices that are less frequent than those in active markets or by
    models that use various assumptions that are derived from or
    supported by data that is generally observable in the
    marketplace. Valuations in this category are inherently less
    reliable than quoted market prices due to the degree of
    subjectivity involved in determining appropriate methodologies
    and the applicable underlying assumptions.
    Level 3  Valuations based on inputs that are
    unobservable and not corroborated by market data. The Company
    does not currently have any financial instruments utilizing
    Level 3 inputs. These financial 60




---



##### Table of Contents



instruments have significant inputs that cannot be validated by
    readily determinable data and generally involve considerable
    judgment by management.    Software
    development
    Stock-based
    compensation
    Item 7A.
    Quantitative
    and Qualitative Disclosure about Market Risk     61




---



##### Table of Contents



intra-day
      and/or
 62




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K. page F-1.
  Quarterly
    results of operations (unaudited)
  Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,


Mar. 31,Quarter Ended

2009


2009


2009


2009


2008


2008


2008


2008(In thousands, except per share data)Revenues:Clearing and commission fees

$
34,826


$
36,911


$
38,183


$
35,125


$
36,478


$
40,215


$
37,348


$
36,513Technology


5,410



6,266



6,452



5,665



6,102



6,190



5,100



4,799Interest, gross


22,246



25,096



30,841



22,036



25,095



47,250



44,934



48,478Other


19,266



12,551



11,809



11,477



13,023



11,267



11,294



9,783Total revenues


81,748



80,824



87,285



74,303



80,698



104,922



98,676



99,573Interest expense from securities operations


7,328



8,601



10,804



7,546



11,638



25,620



24,068



29,373Net revenues


74,420



72,223



76,481



66,757



69,060



79,302



74,608



70,200Expenses:Employee compensation and benefits


27,780



27,204



29,188



28,929



27,218



28,197



29,477



28,823Floor brokerage, exchange and clearance fees


7,666



8,544



8,759



7,416



5,055



8,568



8,692



3,803Communications and data processing


11,572



11,745



11,568



10,557



10,225



10,274



9,579



9,188Occupancy and equipment


7,385



7,422



7,365



7,245



6,762



7,810



7,293



7,022Vendor related asset impairment


247



189



175



213



243



320



189



75Correspondent asset loss


















26,421











Other expenses


8,576



7,463



7,525



8,968



10,222



11,187



8,742



7,282Interest expense on long-term debt


4,303



3,480



1,876



685



807



885



1,086



1,07667,529



66,047



66,456



64,013



86,953



67,241



65,058



57,269Income (loss) before income taxes


6,891



6,176



10,025



2,744



(17,893
)


12,061



9,550



12,931Income tax expense (benefit)


2,550



2,309



3,910



1,056



(7,092
)


4,583



3,653



4,849Net income (loss)

$
4,341


$
3,867


$
6,115


$
1,688


$
(10,801
)

$
7,478


$
5,897


$
8,082Earnings (loss) per share 
    basic

$
0.17


$
0.15


$
0.24


$
0.07


$
(0.43
)

$
0.30


$
0.23


$
0.32Earnings (loss) per share  diluted

$
0.17


$
0.15


$
0.24


$
0.07


$
(0.43
)

$
0.29


$
0.23


$
0.32Weighted average shares outstanding  basic


25,491



25,411



25,329



25,260



25,187



25,108



25,115



25,461Weighted average shares outstanding  diluted


25,651



25,765



25,614



25,300



25,187



25,811



25,200



25,541   Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of disclosure controls and procedures
   63




---



##### Table of Contents



Changes
    in internal control over financial reporting
  Rule 13a-15(f)
  Managements
    report on internal control over financial reporting
  Rules 13a-15(f) 15d-15(f)
        Inherent
    limitation of the effectiveness of internal control
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Item 11.
    Executive
    Compensation   64




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Equity
    compensation plans
  Number of Securities to


Weighted-Averagebe Issued Upon Exercise


Exercise Price of


Number of Securitiesof Outstanding Options,


Outstanding Options,


Remaining AvailablePlan Category

Warrants and Rights(a)


Warrants and Rights


for Future IssuanceEquity Compensation Plans Approved by Security Holders(b)


1,506,199


$
14.48



2,079,556Equity Compensation Plans Not Approved By Security Holders










1,506,199


$
14.48



2,079,556     (a)
    
    Includes shares issuable for unvested restricted stock units.(b)
    
    Includes shares issuable pursuant to the Penson Worldwide, Inc.
    Amended and Restated 2000 Stock Incentive Plan, of which there
    were 1,988,800 shares remaining available for future
    issuance and the Penson Worldwide, Inc. 2005 Employee Stock
    Purchase Plan of which there were 90,756 shares remaining
    available for future issuance.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  1. Financial statements
  page F-1 Form 10-K.
  PageNumberReports of Independent Registered Public Accounting Firm


F-2Statements of Financial Condition


F-4Statements of Income


F-5Statements of Stockholders Equity


F-6Statements of Cash Flows


F-7Notes to the Consolidated Financial Statements


F-8  65




---



##### Table of Contents



Financial statement schedules.
      3. Exhibit list.
   66




---



##### Table of Contents



Signatures      By:
    /s/  PHILIP
    A. PENDERGRAFT   Title:
    Chief Executive Officer  Date:
    Signature

Title

Date/s/  ROGER
    J. ENGEMOEN, JR.Roger
    J. Engemoen, Jr.

Chairman

March 5, 2010/s/  PHILIP
    A. PENDERGRAFTPhilip
    A. Pendergraft

Chief Executive Officer
    (Principal Executive Officer)
    and Director

March 5, 2010/s/  DANIEL
    P. SONDaniel
    P. Son

President and Director

March 5, 2010/s/  KEVIN
    W. MCALEERKevin
    W. McAleer

Executive Vice President & Chief Financial Officer
    (Principal Financial
    and Accounting Officer)

March 5, 2010/s/  JAMES
    S. DYERJames
    S. Dyer

Director

March 5, 2010/s/  DAVID
    JOHNSONDavid
    Johnson

Director

March 5, 2010/s/  THOMAS
    R. JOHNSONThomas
    R. Johnson

Director

March 5, 2010/s/  DAVID
    M. KELLYDavid
    M. Kelly

Director

March 5, 2010/s/  DAVID
    REEDDavid
    Reed

Director

March 5, 2010  67




---



##### 



Index to
    consolidated financial statements
   
 Penson Worldwide, Inc. consolidated financial statements:Reports of Independent Registered Public
    Accounting Firm


F-2Consolidated Financial Statements:Statements of Financial Condition


F-4Statements of Income


F-5Statements of Stockholders Equity


F-6Statements of Cash Flows


F-7Notes to the Consolidated Financial Statements


F-8   F-1




---



##### Table of Contents



Report of
    independent registered public accounting firm            Internal Control  Integrated
    Framework
  BDO
    Seidman, llp
      F-2




---



##### Table of Contents



Report of
    independent registered public accounting firm
      Internal Control  Integrated Framework
            BDO
    Seidman, llp
      F-3




---



##### Table of Contents



Penson
    Worldwide, Inc.
 Consolidated
    Statements of Financial Condition  December 31,2009


2008(In thousands,except par values)ASSETSCash and cash equivalents

$
48,643


$
38,825Cash and securities  segregated under federal and
    other regulations


3,605,651



2,383,948Receivable from broker-dealers and clearing organizations
    (including securities at fair value of $5,149 at
    December 31,2009 and $17,369 at December 31, 2008)


225,130



318,278Receivable from customers, net


1,038,796



687,194Receivable from correspondents


74,992



135,092Securities borrowed


1,271,033



964,080Securities owned, at fair value


223,480



429,531Deposits with clearing organizations (including securities at
    fair value of $356,582 at December 31, 2009 and $290,316 at
    December 31, 2008)


433,243



327,544Property and equipment, net


34,895



28,428Other assets


295,212



226,275Total assets

$
7,251,075


$
5,539,195LIABILITIES AND STOCKHOLDERS EQUITYPayable to broker-dealers and clearing organizations

$
336,056


$
345,094Payable to customers


5,038,338



3,575,401Payable to correspondents


249,659



161,422Short-term bank loans


113,213



130,846Notes payable


132,769



75,000Securities loaned


898,957



842,034Securities sold, not yet purchased, at fair value


97,308



48,383Accounts payable, accrued and other liabilities


85,873



96,548Total liabilities


6,952,173



5,274,728Commitments and contingenciesSTOCKHOLDERS EQUITYPreferred stock, $0.01 par value, 10,000 shares
    authorized; none issued and outstanding as of December 31,
    2009 and 2008






Common stock, $0.01 par value, 100,000 shares
    authorized; 29,022 issued and 25,548 outstanding as of
    December 31, 2009; 28,604 issued and 25,207 outstanding as
    of December 31, 2008


290



286Additional paid-in capital


258,375



244,052Accumulated other comprehensive income (loss), net


1,748



(3,025
)Retained earnings


92,482



76,471Treasury stock, at cost; 3,474 shares at December 31,
    2009; 3,397 shares at December 31, 2008


(53,993
)


(53,317
)Total stockholders equity


298,902



264,467Total liabilities and stockholders equity

$
7,251,075


$
5,539,195    F-4




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Consolidated Statements of Income
  Year Ended December 31,2009


2008


2007(In thousands, except per share data)RevenuesClearing and commission fees

$
145,045


$
150,554


$
117,905Technology


23,793



22,191



15,191Interest, gross


100,219



165,757



228,477Other


55,103



45,367



43,229Total revenues


324,160



383,869



404,802Interest expense from securities operations


34,279



90,699



140,077Net revenues


289,881



293,170



264,725ExpensesEmployee compensation and benefits


113,101



113,715



101,979Floor brokerage, exchange and clearance fees


32,385



26,118



27,326Communications and data processing


45,442



39,266



30,770Occupancy and equipment


29,417



28,887



23,570Vendor related asset impairment


824



827



10,861Correspondent asset loss






26,421



Other expenses


32,532



37,433



25,367Interest expense on long-term debt


10,344



3,854



2,894264,045



276,521



222,767Income before income taxes


25,836



16,649



41,958Income tax expense


9,825



5,993



15,125Net income

$
16,011


$
10,656


$
26,833Earnings per share  basic

$
0.63


$
0.42


$
1.02Earnings per share  diluted

$
0.63


$
0.42


$
1.00Weighted average common shares  basic


25,373



25,217



26,232Weighted average common shares  diluted


25,591



25,416



26,817    F-5




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Consolidated Statements of Stockholders
    Equity
  AccumulatedPreferred








Additional





Other





TotalStock


Common stock


Paid-In


Treasury


Comprehensive


Retained


StockholdersAmount


Shares


Amount


Capital


Stock


Income (loss)


Earnings


Equity(In thousands)Balance, December 31, 2006

$




25,078


$
262


$
188,219


$
(18,418
)

$
2,159


$
39,562


$
211,784Net income


























26,833



26,833Foreign currency translation adjustments, net of tax of $3,098






















4,805







4,805Repurchase of treasury stock






(1,607
)










(27,468
)










(27,468
)Stock-based compensation expense






173



1



4,692















4,693Exercise of stock options






112



1



1,066















1,067Excess tax benefit from stock-based compensation plans














823















823Purchases of stock under the employee stock purchase plan






128



1



2,014















2,015Issuance of common stock






1,659



17



41,439















41,456Cumulative effect of adoption of FIN 48 (ASC 740)


























(580
)


(580
)Balance, December 31, 2007






25,543



282



238,253



(45,886
)


6,964



65,815



265,428Net income


























10,656



10,656Foreign currency translation adjustments, net of tax of $6,440






















(9,989
)






(9,989
)Repurchase of treasury stock






(714
)










(7,431
)










(7,431
)Stock-based compensation expense






188



2



4,521















4,523Exercise of stock options






36







168















168Excess tax deficiency from stock-based compensation plans














(459
)














(459
)Purchases of stock under the employee stock purchase plan






110



1



999















1,000Issuance of common stock






44



1



570















571Balance, December 31, 2008






25,207



286



244,052



(53,317
)


(3,025
)


76,471



264,467Net income


























16,011



16,011Foreign currency translation adjustments, net of tax of $3,077






















4,773







4,773Repurchase of treasury stock






(77
)










(676
)










(676
)Stock-based compensation expense






275



3



5,084















5,087Excess tax deficiency from stock-based compensation plans














(473
)














(473
)Purchases of stock under the employee stock purchase plan






108



1



655















656Equity component of the conversion feature attributable to
    senior convertible notes, net of tax of $5,593














8,822















8,822Issuance of common stock






35







235















235Balance, December 31, 2009

$




25,548


$
290


$
258,375


$
(53,993
)

$
1,748


$
92,482


$
298,902    F-6




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Consolidated Statements of Cash
    Flows
  Year Ended December 31,2009


2008


2007(In thousands)Cash flows from operating activities:Net income

$
16,011


$
10,656


$
26,833Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:Depreciation and amortization


19,158



20,247



16,777Deferred income taxes


5,131



977



(2,274
)Stock-based compensation


5,087



4,523



4,693Debt discount accretion


1,534







Debt issuance costs


1,081







Changes in operating assets and liabilities:Cash and securities  segregated under federal and
    other regulations


(1,195,735
)


(1,005,993
)


(804,145
)Net receivable/payable with customers


1,072,964



736,513



1,291,953Net receivable/payable with correspondents


142,377



(63,611
)


(51,266
)Securities borrowed


(293,329
)


1,089,050



(282,594
)Securities owned


235,270



(234,799
)


(58,533
)Deposits with clearing organizations


(103,306
)


(35,589
)


(82,314
)Other assets


(43,318
)


92,189



(146,832
)Net receivable/payable with broker-dealers and clearing
    organizations


65,517



449,542



(334,763
)Securities loaned


56,452



(882,064
)


137,282Securities sold, not yet purchased


40,418



(25,495
)


21,992Accounts payable, accrued and other liabilities


(12,353
)


8,051



24,114Net cash provided by (used in) operating activities


12,959



164,197



(239,077
)Cash flows from investing activities:Business combinations, net of cash acquired


(32,262
)


(33,370
)


(34,156
)Purchases of property and equipment


(21,741
)


(19,031
)


(15,484
)Net cash used in investing activities


(54,003
)


(52,401
)


(49,640
)Cash flows from financing activities:Net proceeds from convertible notes


56,200







Proceeds from revolving credit facility


50,000



20,000



206,000Repayments of revolving credit facility


(36,500
)






(161,000
)Net borrowing (repayments) on short-term bank loans


(20,905
)


(196,380
)


280,344Exercise of stock options






168



1,067Excess tax benefit from stock-based compensation plans


27



75



823Purchase of treasury stock


(676
)


(7,431
)


(27,468
)Issuance of common stock


656



1,000



2,015Net cash provided by (used in) financing activities


48,802



(182,568
)


301,781Effect of exchange rates on cash


2,060



(11,326
)


4,805Increase (decrease) in cash and cash equivalents


9,818



(82,098
)


17,869Cash and cash equivalents at beginning of period


38,825



120,923



103,054Cash and cash equivalents at end of period

$
48,643


$
38,825


$
120,923Supplemental cash flow disclosures:Interest payments

$
10,633


$
18,277


$
23,252Income tax payments

$
3,807


$
19,639


$
16,466    F-7




---



##### Table of Contents



Penson
    Worldwide, Inc.



Notes to
    the Consolidated Financial Statements



(In
    thousands, except per share data or where noted) 1.
    Basis of
    presentation  Organization and Business
          2.
    Summary
    of significant accounting policies  Securities Transactions
  Securities Lending Activities
 F-8




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Reverse Repurchase and Repurchase Agreements
  Revenue Recognition
    percentage-of-completion Revenue Recognition
  Income Taxes
  Property and Equipment
 F-9




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Goodwill
  Balance, December 31, 2007

$
44,117Goodwill acquired


50,770Balance, December 31, 2008


94,887Goodwill acquired


17,936Balance, December 31, 2009

$
112,823     Intangibles
  Gross Carrying


Accumulated


Net Carrying2009

Amount


Amortization


ValueCustomer related intangible assets

$
20,007


$
3,762


$
16,245Purchased technology


14,082



13,094



988Other


2,760



251



2,509Total

$
36,849


$
17,107


$
19,742   Gross Carrying


Accumulated


Net Carrying2008

Amount


Amortization


ValueCustomer related intangible assets

$
20,007


$
2,310


$
17,697Purchased technology


14,082



11,521



2,561Other


2,760



140



2,620Total

$
36,849


$
13,971


$
22,878    F-10




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Financing Costs
  Operating Leases
  Stock-Based Compensation
  Managements Estimates and Assumptions
  Cash and Cash Equivalents
  Securities Owned and Securities Sold, Not Yet
    Purchased
  Fair Value of Financial Instruments
  Allowance for Doubtful Accounts
 F-11




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  account-by-account
  Software Costs and Expenses
  Net Income Per Share
  Foreign Currency Translation Adjustments
  Reclassifications 
  Recent
    Accounting Pronouncements
  FASB Accounting Standards
    Codification
 F-12




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  paid-in-capital
      and/or Form 10-K
  3.
    Acquisitions  Acquisition
    of Ridge
  90-day
 F-13




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Acquisition
    of First Capitol Group LLC
    Acquisition
    of GHCO
    Acquisition
    of Schonfeld
   F-14




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   5.
    Computation
    of net income per share    Year Ended December 31,2009


2008


2007Basic and diluted:Net income

$
16,011


$
10,656


$
26,833Weighted average common shares outstanding  basic


25,373



25,217



26,232Incremental shares from outstanding stock options


26



33



202Incremental shares from non-vested restricted stock units


101



12



120Shares issuable


18



154



263Convertible debt


73







Weighted average common shares and common share
    equivalents  diluted


25,591



25,416



26,817Basic earnings per common share

$
.63


$
.42


$
1.02Diluted earnings per common share

$
.63


$
.42


$
1.00     6.
    Fair
    value of financial instruments  and/or
  
    Level 1  Inputs are quoted prices in active
    markets for identical assets or liabilities that the Company has
    the ability to access at the measurement date. Valuation of
    these instruments does not require a high degree of judgment as
    the valuations are based on quoted prices in active markets that
    are readily and regularly available.
    Level 2  Inputs other than quoted prices in
    active markets that are either directly or indirectly observable
    as of the measurement date, such as quoted prices for similar
    assets or liabilities; quoted prices in markets that are not
    active; or other inputs that are observable or can be
    corroborated by observable market data for substantially the
    full term of the assets or liabilities. These financial
    instruments are valued by quoted prices that are less frequent
    than those in active markets or by models that use various
    assumptions that are derived from or supported by data that is
    generally observable in the marketplace. Valuations in this
    category are F-15




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  inherently less reliable than quoted market prices due to the
    degree of subjectivity involved in determining appropriate
    methodologies and the applicable underlying assumptions.  
    Level 3  Valuations based on inputs that are
    unobservable and not corroborated by market data. The Company
    does not currently have any financial instruments utilizing
    Level 3 inputs. These financial instruments have
    significant inputs that cannot be validated by readily
    determinable data and generally involve considerable judgment by
    management.    U.S.
    government and agency securities
      Canadian
    government obligations
    Corporate
    equity
    Corporate
    debt
    Listed
    option contracts
    Certificates
    of deposit and term deposits
    Money
    market
   F-16




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    December 31, 2009

Level 1


Level 2


TotalReceivable from broker-dealers and clearing organizationsU.S. government and agency securities

$
5,149


$



$
5,149$
5,149


$



$
5,149Securities ownedCorporate equity

$
2,021


$



$
2,021Listed option contracts


127







127Corporate debt






70,398



70,398Certificates of deposit and term deposits






26,368



26,368U.S. government and agency securities


73,775







73,775Canadian government obligations






33,691



33,691Money market


17,100







17,100$
93,023


$
130,457


$
223,480Deposits with clearing organizationsU.S. government and agency securities

$
261,050


$



$
261,050Money market


95,532







95,532$
356,582


$



$
356,582Securities sold, not yet purchasedCorporate equity

$
16


$



$
16Listed option contracts


228







228Corporate debt






63,850



63,850Canadian government obligations






33,214



33,214$
244


$
97,064


$
97,308   F-17




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  December 31, 2008

Level 1


Level 2


TotalReceivable from broker-dealers and clearing organizationsU.S. government and agency securities

$
17,369


$



$
17,369$
17,369


$



$
17,369Securities ownedCorporate equity

$
2,493


$



$
2,493Listed option contracts


38







38Corporate debt






24,062



24,062Certificates of deposit and term deposits






82,049



82,049U.S. government and agency securities


63,261







63,261Canadian government obligations






51,428



51,428Money market


206,200







206,200$
271,992


$
157,539


$
429,531Deposits with clearing organizationsU.S. government and agency securities

$
231,962


$



$
231,962Money market


58,354







58,354$
290,316


$



$
290,316Securities sold, not yet purchasedCorporate equity

$
1,044


$



$
1,044Listed option contracts


1,878







1,878Corporate debt






16,217



16,217Certificates of deposit and term deposits






9,658



9,658Canadian government obligations






19,586



19,586$
2,922


$
45,461


$
48,383   7.
    Segregated
    assets  Rule 15c3-3 Rule 15c3-3. Rule 15c3-3. Rule 15c3-3
 F-18




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   8.
    Receivable
    from and payable to broker-dealers and clearing
    organizations    December 31,2009


2008Receivable:Securities failed to deliver

$
62,613


$
75,022Receivable from clearing organizations


162,517



243,256$
225,130


$
318,278Payable:Securities failed to receive

$
51,695


$
41,108Payable to clearing organizations


284,361



303,986$
336,056


$
345,094       9.
    Receivable
    from and payable to customers and correspondents   F-19




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   10.
    Securities
    owned and securities sold, not yet purchased    December 31,2009


2008Securities Owned:Corporate equity

$
2,021


$
2,493Listed option contracts


127



38Corporate debt


70,398



24,062Certificates of deposit and term deposits


26,368



82,049U.S. federal and agency securities


73,775



63,261Canadian government obligations


33,691



51,428Money market


17,100



206,200$
223,480


$
429,531Securities Sold, Not Yet Purchased:Corporate equity

$
16


$
1,044Listed option contracts


228



1,878Corporate debt


63,850



16,217Certificates of deposit and term deposits


33,214



9,658Canadian government obligations






19,586$
97,308


$
48,383     11.
    Reverse
    repurchase and repurchase agreements   F-20




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   12.
    Property
    and equipment    December 31,2009


2008Equipment

$
33,729


$
26,604Software


61,925



46,372Furniture


5,146



4,837Leasehold improvements


6,825



6,293Other


1,826



1,647109,451



85,753Less accumulated depreciation and amortization


74,556



57,325Property and equipment, net

$
34,895


$
28,428     13.
    Short-term
    bank loans      14.
    Notes
    payable    December 31,2009


2008Bank credit line up to $100,000, unsecured, with a variable rate
    of interest that approximated 7.0% and 7.6% at December 31,
    2009 and 2008. Payable in full in April 2010

$
88,500


$
75,0008.00% Senior Convertible Notes with a principal amount of
    $60,000, unsecured. Payable in full in June 2014


44,269



$
132,769


$
75,000  F-21




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Revolving
    Credit Facility
    Senior
    Convertible Notes
      business-day trading-day
 F-22




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
              Amount2010

$
88,5002011


2012


2013


2014


60,000$
148,500  F-23




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   15.
    Stockholders
    equity    Preferred


Common


TreasuryStock


Stock


StockBalance, December 31, 2006






25,078



1,076Issuance of common stock






1,659



Repurchase of treasury stock






(1,607
)


1,607Stock-based compensation






173



Purchases under the employee stock purchase plan






128



Exercise of stock options






112



Balance, December 31, 2007






25,543



2,683Issuance of common stock






44



Repurchase of treasury stock






(714
)


714Stock-based compensation






188



Purchases under the employee stock purchase plan






110



Exercise of stock options






36



Balance, December 31, 2008






25,207



3,397Issuance of common stock






35



Repurchase of treasury stock






(77
)


77Stock-based compensation






275



Purchases under the employee stock purchase plan






108



Balance, December 31, 2009






25,548



3,474   Additional
    paid-in capital
    Comprehensive
    income
      Year Ended December 31,2009


2008


2007Net income

$
16,011


$
10,656


$
26,833Foreign currency translation gain (loss)


4,773



(9,989
)


4,805Comprehensive income

$
20,784


$
667


$
31,638  F-24




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2009


2008


2007Canadian DollarsIncome statement

$
0.88


$
0.95


$
0.95Balance sheet


0.95



0.82



1.01British PoundsIncome statement

$
1.56


$
1.85


$
2.01Balance sheet


1.61



1.44



1.99Australian DollarsIncome statement

$
0.90


$



$
Balance sheet


0.90







     Dividends
    16.
    Financial
    instruments with off-balance sheet risk      intra-day intra-day
     F-25




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      17.
    Related
    party transactions         F-26




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
             F-27




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    18.
    Employee
    benefit plan    19.
    Stock-based
    compensation      Stock
    options
   F-28




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2009


2008


2007Weighted-average grant date fair value

$



$



$
6.93Weighted average assumptions used:Expected volatility










27.0
%Expected term (in years)










3.90Risk-free interest rate










4.7
%Expected dividend yield










         Weighted


AggregateWeighted


Average


IntrinsicNumber of


Average


Contractual


Value of In-theShares


Exercise Price


Term


Money Options(In whole dollars)


(In years)Outstanding, December 31, 2006


1,280


$
15.44



6.43


$
15,320Granted


160



25.22







Exercised


(112
)


9.54







Forfeited, cancelled or expired


(159
)


17.16







Outstanding, December 31, 2007


1,169


$
17.10



5.79


$
946Granted














Exercised


(36
)


4.72







Forfeited, cancelled or expired


(105
)


18.95







Outstanding, December 31, 2008


1,028


$
17.35



4.78


$
206Granted














Exercised














Forfeited, cancelled or expired


(96
)


19.35







Outstanding, December 31, 2009


932


$
17.13



3.91


$
290Options exercisable at December 31, 2009


817


$
16.90



3.92


$
290    F-29




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    Restricted
    stock units
    Weighted


WeightedAverage


Average


AggregateNumber of


Grant Date


Contractual


IntrinsicUnits


Fair Value


Term


Value(In whole dollars)


(In years)Outstanding, December 31, 2006


559


$
14.44



3.2


$
15,335Granted


94



27.12







Vested and issued


(170
)


15.51







Terminated, cancelled or expired


(93
)


13.42







Outstanding, December 31, 2007


390


$
17.39



2.6


$
5,596Granted


599



10.07







Vested and issued


(188
)


15.22







Terminated, cancelled or expired


(52
)


17.97







Outstanding, December 31, 2008


749


$
12.06



2.9


$
5,704Granted


207



6.72







Vested and issued


(275
)


12.76







Terminated, cancelled or expired


(107
)


10.06







Outstanding, December 31, 2009


574


$
10.17



2.4


$
5,202     Employee
    stock purchase plan
     F-30




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    20.
    Commitments
    and contingencies    Capital


OperatingLeases


Leases2010

$
6,218


$
5,5792011


3,765



5,3832012


488



4,3182013






3,7062014






2,8752015 and thereafter






6,723$
10,471


$
28,584          F-31




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   21.
    Income
    taxes    Year Ended December 31,2009


2008


2007Income before income taxes:U.S.

$
14,975


$
25,993


$
23,238Non-U.S.


10,861



(9,344
)


18,72025,836



16,649



41,958     Year Ended December 31,2009


2008


2007Current:Federal

$
1,125


$
8,804


$
9,877State


354



617



1,875Non-U.S.


3,215



(4,405
)


5,6474,694



5,016



17,399Deferred:Federal

$
4,557


$
930


$
(1,818
)State


543



110



(215
)Non-U.S.


31



(63
)


(241
)5,131



977



(2,274
)Total

$
9,825


$
5,993


$
15,125     Year Ended December 31,2009


2008


2007Federal statutory income tax rate


35.0
%


35.0
%


35.0
%Lower tax rates applicable to
    non-U.S.
    earnings


(2.1
)


(2.4
)


(2.7
)International trade tax credit






(4.8
)


State and local income taxes, net of U.S. federal income tax
    benefits


2.3



5.2



2.6Stock-based compensation


2.2



3.4



1.0Other, net


0.6



(0.4
)


0.138.0
%


36.0
%


36.0
%    F-32




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Deferred
    income taxes consist of the following:
  December 31,2009


2008Current deferred taxes:Bad debt allowance

$
2,158


$
1,559Accrued expenses






662Prepaid assets


(690
)


(1,498
)Total

$
1,468


$
723Non-current deferred taxes:Fixed asset basis differences

$
(2,890
)

$
1,241Intangible assets


(3,155
)


(183
)Stock-based compensation


1,824



1,078Equity component of the conversion feature attributable to
    senior convertible notes


(4,968
)


Other


(137
)


(167
)Total

$
(9,326
)

$
1,969Total

$
(7,858
)

$
2,692   non-U.S. income
  Income Taxes
  Balance at January 1, 2007

$
580Additions based on tax positions related to the current year


398Reductions for tax positions of prior years


(152
)Balance at December 31, 2007


826Additions based on tax positions related to the current year


657Reductions for tax positions of prior years


(526
)Balance at December 31, 2008


957Additions based on tax positions related to the current year


230Reductions for tax positions of prior years


(191
)Balance at December 31, 2009

$
996    F-33




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    22.
    Segment
    information    UnitedDecember 31, 2009

States


Canada


Other


ConsolidatedRevenues

$
260,064


$
52,404


$
11,692


$
324,160Interest, net


60,710



3,649



1,581



65,940Income before tax


14,975



10,442



419



25,836Net income


8,396



7,285



330



16,011Segment assets


5,918,739



1,122,703



209,633



7,251,075Goodwill and intangibles


131,715



538



312



132,565Capital expenditures


18,435



1,272



2,034



21,741Depreciation and amortization


13,346



1,120



1,556



16,022Amortization of intangibles


3,136











3,136   UnitedDecember 31, 2008

States


Canada


Other


ConsolidatedRevenues

$
291,643


$
71,302


$
20,924


$
383,869Interest, net


61,535



11,365



2,158



75,058Income (loss) before tax


25,993



(9,554
)


210



16,649Net income (loss)


15,532



(4,964
)


88



10,656Segment assets


4,610,951



607,500



320,744



5,539,195Goodwill and intangibles


116,915



538



312



117,765Capital expenditures


14,803



1,130



3,098



19,031Depreciation and amortization


13,265



1,536



1,314



16,115Amortization of intangibles


4,121



11







4,132   UnitedDecember 31, 2007

States


Canada


Other


ConsolidatedRevenues

$
303,999


$
75,279


$
25,524


$
404,802Interest, net


73,688



12,664



2,048



88,400Income before tax


23,238



16,025



2,695



41,958Net income


13,519



11,442



1,872



26,833Segment assets


5,957,182



1,619,398



270,397



7,846,977Goodwill and intangibles


74,216



549



312



75,077Capital expenditures


11,888



1,807



1,789



15,484Depreciation and amortization


10,853



1,388



982



13,223Amortization of intangibles


3,498



56







3,554  F-34




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
   23.
    Regulatory
    requirements  (Rule 15c3-1), Rule 15c3-1, (Rule 15c3-3).
      24.
    Guarantees      25.
    Vendor
    related asset impairment   F-35




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
    20-23,
      26.
    Correspondent
    asset loss  and/or and/or
 F-36




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
      27.
    Stock
    repurchase program    28.
    Condensed
    financial statements of Penson Worldwide, Inc. (parent
    only)    Penson
    Worldwide, Inc. (parent only)
    Condensed Statements of Financial Condition
  December 31,2009


2008AssetsCash and cash equivalents

$
249


$
9Receivable from affiliates


202,929



140,255Property and equipment, net


9,848



5,815Investment in subsidiaries


234,032



194,236Other assets


2,990



6,789Total assets

$
450,048


$
347,104Liabilities and stockholders equityNotes payable

$
132,769


$
75,000Accounts payable, accrued and other liabilities


18,377



7,637Total liabilities


151,146



82,637Total stockholders equity


298,902



264,467Total liabilities and stockholders equity

$
450,048


$
347,104  F-37




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Penson
    Worldwide, Inc. (parent only)
    Condensed Statements of Income
  Year Ended December 31,2009


2008


2007Revenues

$
5,075


$
5,097


$
4,776ExpensesEmployee compensation and benefits


12,753



11,533



440Communications and data processing


2,562



60



Occupancy and equipment


7,170



4,745



Other expenses


4,522



6,562



8,132Interest expense on long-term debt


10,187



3,854



2,89437,194



26,754



11,466Loss before income taxes and equity in earnings of subsidiaries


(32,119
)


(21,657
)


(6,690
)Income tax benefit


(16,182
)


(10,669
)


(11,057
)Income (loss) before equity in earnings of subsidiaries


(15,937
)


(10,988
)


4,367Equity in earnings of subsidiaries


31,948



21,644



22,466Net income

$
16,011


$
10,656


$
26,833  F-38




---



##### Table of Contents



Penson
    Worldwide, Inc.
  Notes to
    the Consolidated Financial
    Statements  (Continued)
  Penson
    Worldwide, Inc. (parent only)
    Condensed Statements of Cash Flows
  Year Ended December 31,2009


2008


2007Cash flows from operating activities:Net income

$
16,011


$
10,656


$
26,833Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:Depreciation and amortization


5,376



4,722



4,112Deferred income taxes


5,131



977



(2,274
)Stock based compensation


5,087



4,523



4,693Debt discount accretion


1,534







Debt issuance costs


882







Changes in operating assets and liabilities:Net receivable/payable with affiliates


(62,674
)


(6,494
)


(29,500
)Other assets


1,410



(2,417
)


(262
)Accounts payable, accrued and other liabilities


4,921



(5,695
)


4,808Net cash provided by (used in) operating activities


(22,322
)


6,272



8,410Cash flows from investing activities:Purchase of property and equipment, net


(9,409
)


(3,545
)


(4,277
)Increase in investment in subsidiaries


(39,796
)


(5,216
)


(30,369
)Net cash used in investing activities


(49,205
)


(8,761
)


(34,646
)Cash flows from financing activities:Net proceeds from convertible notes


56,200







Proceeds from revolving credit facility


50,000



20,000



206,000Repayments of revolving credit facility


(36,500
)






(161,000
)Exercise of stock options






168



1,067Excess tax benefit on exercise of stock options


27



75



823Purchase of treasury stock


(676
)


(7,431
)


(27,468
)Issuance of common stock


656



1,000



2,016Net cash provided by financing activities


69,707



13,812



21,438Effect of exchange rates on cash


2,060



(11,326
)


4,805Increase (decrease) in cash and cash equivalents


240



(3
)


7Cash and cash equivalents at beginning of period


9



12



5Cash and cash equivalents at end of period

$
249


$
9


$
12Supplemental cash flow disclosures:Interest payments

$
5,350


$
4,265


$
1,562Income tax payments

$
3,409


$
11,762


$
9,940  F-39




---



##### Table of Contents



INDEX TO
    EXHIBITS
  Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date2
.1

Asset Purchase Agreement by and between SAI Holdings, Inc. and
    Schonfeld Securities, LLC, dated as of November 20, 2006

8-K

001-32878

2.1

11/21/062
.2

Purchase Agreement by and among Goldenberg Hehmeyer &
    Co. and Goldenberg LLC, Hehmeyer LLC, GHCO Partners LLC, GH
    Traders LLC, each of the Principals listed on the signature
    pages thereto and SAI Holdings, Inc., GHP1, Inc., GHP2, LLC and
    Christopher Hehmeyer in his capacity as Sellers
    Representative

8-K

001-32878

2.1

11/7/062
.3

Letter Agreement, dated as of October 8, 2007, by and among
    SAI  Holdings, Inc., Penson Financial Services, Inc., Schonfeld
    Group Holdings LLC, Schonfeld Securities, LLC, Opus Trading
    Fund LLC and Quantitative Trading Strategies LLC

8-K

001-32878

2.1

10/12/072
.4*

Asset Purchase Agreement by and among Penson Worldwide, Inc.,
    Penson Financial Services, Inc., Broadridge Financial Solutions,
    Inc. and Ridge Clearing & Outsourcing Solutions, Inc.,
    dated November 2, 20093
.1

Form of Amended and Restated Certificate of Incorporation of
    Penson Worldwide, Inc.

S-1/A

333-127385

3.1

5/1/063
.2

Form of Third Amended and Restated Bylaws of Penson Worldwide,
    Inc.

8-K

001-32878

3.2

6/5/094
.1

Specimen certificate for shares of Common Stock

S-1

333-127385

4.1

4/24/064
.2+

Amended and Restated Registration Rights Agreement between Roger
    J. Engemoen, Jr., Philip A. Pendergraft and Daniel P. Son and
    Penson Worldwide, Inc. dated November 30, 2000

S-1

333-127385

4.2

8/10/054
.3

Indenture, dated June 3, 2009, between Penson Worldwide,
    Inc. and U.S. Bank National Association

8-K

001-32878

4.1

6/5/094
.4

Form of 8.00% Senior Convertible Note due 2014

8-K

001-32878

4.2

6/5/0910
.1+

Penson Worldwide, Inc. Amended and Restated 2000 Stock Incentive
    Plan

DEF 14A

001-32878

Appendix A

4/8/0910
.2+

Penson Worldwide, Inc. 2005 Employee Stock Purchase Plan

S-1/A

333-127385

10.2

4/24/0610
.3

1700 Pacific Avenue Office Lease by and between F/P/D Master
    Lease, Inc. and Penson Financial Services, Inc. (f/k/a Service
    Asset Management Company) dated May 20, 1998 as amended
    July 16, 1998, February 17, 1999, September 20,
    1999, November 30, 1999, May 25, 2000 and
    January 9, 2001

S-1

333-127385

10.3

8/10/0510
.4

Lease of Premises between Downing Street Holdings (330 Bay St),
    Inc. and Penson Financial Services Canada Inc. (one of our
    subsidiaries) dated September 17, 2002

S-1

333-127385

10.4

8/10/05




---



##### Table of Contents



Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date10
.5

Offer to Lease between Penson Financial Services Canada Inc. and
    360 St-Jacques Nova Scotia Company dated October 14, 2003

S-1

333-127385

10.5

8/10/0510
.6

Lease agreement between Derwent Valley London Limited, Derwent
    Valley Central Limited, Penson Financial Services Limited, and
    Penson Worldwide, Inc. effective August 11, 2005

S-1

333-127385

10.6

8/10/0510
.7

Remote Processing Agreement between Penson Worldwide, Inc. and
    SunGard Data Systems Inc. dated July 10, 1995, as amended
    September 13, 1996 and August 1, 2002

S-1/A

333-127385

10.11

8/10/0510
.8

Form of SAMCO Reorganization Agreement by and between Penson
    Worldwide, Inc., SAI Holdings, Inc. and Penson Financial
    Services, Inc. and SAMCO Capital Markets, Inc. and SAMCO
    Holdings, Inc.

S-1/A

333-127385

10.12

5/1/0610
.9

Form of Transition Services Agreement by and between SAMCO
    Holdings, Inc. and Penson Worldwide, Inc.

S-1/A

333-127385

10.13

5/1/0610
.10+

Employment Letter Agreement between the Company and Andrew
    Koslow dated August 26,  2002

S-1

333-127385

10.15

8/10/0510
.11+

Form of Indemnification Agreement entered into between Penson
    Worldwide, Inc. and its officers and directors

S-1

333-127385

10.16

8/10/0510
.12

Registration Rights Agreement by and between Penson Worldwide,
    Inc. and Schonfeld Securities, LLC, dated as of
    November 20, 2006

8-K

001-32878

10.1

3/21/0610
.13

Stockholders Agreement effective as of November 20,
    2006 between Penson Worldwide, Inc. and Schonfeld Securities, LLC

8-K

001-32878

10.2

11/21/0610
.14

Guaranty Agreement made as of November 20, 2006 by
    Schonfeld Group Holdings LLC in favor of SAI Holdings, Inc. and
    Penson Financial Services, Inc.

8-K

001-32878

10.3

11/21/0610
.15

Unconditional Guaranty Agreement made as of November 20,
    2006 by Schonfeld Group Holdings LLC, Schonfeld Securities LLC
    and Steven B. Schonfeld in favor of Penson Financial Services,
    Inc.

8-K

001-32878

10.4

11/21/0610
.16

Termination/Compensation Payment Agreement, dated as of
    November 20, 2006, by and among Opus Trading Fund LLC,
    Quantitative Trading Solutions, LLC and Penson Financial
    Services, Inc.

8-K

001-32878

10.5

11/21/0610
.17+

Employment Letter Agreement between the Company and Kevin W.
    McAleer dated February 15, 2006

S-1/A

333-127385

10.22

3/21/0610
.18+

Executive Employment Agreement between the Company and Philip A.
    Pendergraft dated April 21,  2006

S-1/A

333-127385

10.23

5/1/0610
.19+

Executive Employment Agreement between the Company and Daniel P.
    Son dated April 21,  2006

S-1/A

333-127385

10.24

5/1/06




---



##### Table of Contents



Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date10
.20

Eighth Amendment to 1700 Pacific Avenue Office Lease by and
    between Berkeley First City, Ltd. and Penson Worldwide, Inc.
    dated April 12, 2006

S-1/A

333-127385

10.25

5/9/0610
.21

Amendment to Remote Processing Agreement between Penson
    Worldwide, Inc. and SunGard Data Systems Inc. dated
    July 10, 1995, as amended September 13, 1996 and
    August 1, 2002

8-K

001-32878

10.10

7/31/0610
.22

Letter Agreement dated February 16th, 2007, amending that
    certain Purchase Agreement dated as of November 6, 2006
    among Goldenberg Hehmeyer & Co., Goldenberg LLC,
    Hehmeyer LLC, GH Trading LLC, GHCO Partners LLC, Christopher
    Hehmeyer, Ralph Goldenberg, SAI Holdings, Inc., GH1 Inc. and GH2
    LLC and Christopher Hehmeyer in his capacity as Sellers
    Representative

8-K

001-32878

10.2

2/16/0710
.23

Schedule E, dated July 23, 2007, to the Remote
    Processing Agreement between Penson Worldwide, Inc. and SunGard
    Data Systems Inc. dated July 10, 1995, as amended
    September 13, 1996 and August 1, 2002

10-Q

001-32878

10.2

11/13/0710
.24+

2008 Restricted Stock Bonus Incentive Plan

8-K

001-32878

10.1

6/25/0810
.25+

Amended and Restated Executive Employment Agreement between the
    Company and Daniel P. Son, dated December 31, 2008

10-K

001-32878

10.44

3/16/0910
.26+

Amended and Restated Executive Employment Agreement between the
    Company and Philip A. Pendergraft, dated December 31, 2008

10-K

001-32878

10.45

3/16/0910
.27+

Amendment to Compensation Letter between the Company and Andrew
    B. Koslow, dated December 31,  2008

10-K

001-32878

10.46

3/16/0910
.28+

Amendment to Compensation Letter between the Company and Kevin
    W. McAleer, dated December 31, 2008

10-K

001-32878

10.47

3/16/0910
.29

Purchase Agreement by and among Penson Worldwide, Inc. and J.P.
    Morgan Securities Inc. and Morgan Keegan & Company,
    Inc., dated May 28, 2009

8-K

001-32878

10.1

5/29/0910
.30+

2010 Executive Bonus Plan

8-K

001-32878

10.1

2/16/1010
.31

Eighth Amendment to Credit Agreement, dated the 16th day of
    March, 2009, effective as of December 31, 2008, by and
    among the Company, Guaranty Bank, as Administrative Agent, Swing
    Line Lender, Arranger and Letter of Credit Issuer, Wachovia
    Bank, National Association, as Documentation Agent and the other
    lenders party thereto

10-Q

001-32878

10.1

5/8/0910
.32

Amended and Restated Credit Agreement, dated the 1st day of May,
    2009, by and among the Company, Regions Bank, as Administrative
    Agent, Swing Line Lender, and Letter of Credit Issuer, the
    lenders party thereto and the other parties thereto

10-Q

001-32878

10.1

8/4/09




---



##### Table of Contents



Incorporated by Reference

FilingExhibit

Name of Exhibit

Form

File Number

Exhibit

Date10
.33

First Amendment to the Amended and Restated Credit Agreement,
    dated the 1st day of May, 2009, by and among the Company,
    Regions Bank, as Administrative Agent, Swing Line Lender and
    Letter of Credit Issuer, the lenders party thereto and the other
    parties thereto

10-Q

001-32878

10.2

8/4/0910
.34

Second Amendment to the Amended and Restated Credit Agreement,
    dated the 22nd day of September, 2009, by and among the Company,
    Regions Bank, as Administrative Agent, Swing Line Lender and
    Letter of Credit Issuer, the lenders party thereto and the other
    parties thereto

10-Q

001-32878

10.1

11/6/0910
.35*

Master Services Agreement by and between Penson Worldwide, Inc.
    and Broadridge Financial Solutions, Inc., dated November 2,
    200910
.36*

Service Bureau and Operations Support Services Schedule to the
    Master Services Agreement between Penson Worldwide, Inc. and
    Broadridge Financial Solutions, Inc., dated November 2,
    2009, by and between Penson Financial Services, Inc. and Ridge
    Clearing & Outsourcing Solutions, Inc. dated
    November 2, 200910
.37*

Service Bureau and Operations Support Services Schedule to the
    Master Services Agreement between Penson Worldwide, Inc. and
    Broadridge Financial Solutions, Inc., dated November 2,
    2009, by and between Penson Financial Services Canada Inc. and
    Ridge Clearing & Outsourcing Solutions, Inc. dated
    November 2, 200911
.1

Statement regarding computation of per share earnings

S-1/A

333-127385

11.1

5/1/0612
.1*

Statement regarding computation of ratios21
.1*

List of Subsidiaries23
.1*

Consent of BDO Seidman, LLP31
.1*

Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 (filed
    herewith)31
.2*

Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 (filed
    herewith)32
.1*

Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 (filed
    herewith)32
.2*

Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 (filed
    herewith)     *
    
    Filed herewith.+
    
    Management contracts or compensation plans or arrangements in
    which directors or executive officers are eligible to
    participate.
    
    Confidential treatment has been requested for certain
    information contained in this document. Such information has
    been omitted and filed separately with the Securities and
    Exchange Commission.