SecProbe.io

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ANGELA C. HILT
415-442-1276
ahilt@morganlewis.com

October 19, 2005

VIA EDGAR TRANSMISSION AND FACSIMILE

Securities and Exchange Commission
Division of Corporate Finance
100 F Street, NE
Washington, D.C. 20549

Attn: Mr. Kevin W. Vaughn

RE:      PENSON WORLDWIDE, INC. REGISTRATION STATEMENT ON FORM S-1
         FILED AUGUST 10, 2005
         FILE NO. 333-127385

Dear Mr. Vaughn:

         We are writing on behalf of Penson Worldwide, Inc. (the "Company"), in
response to the letter of comments from the Staff of the Securities and Exchange
Commission to the Company dated October 12, 2005 (the "Comment Letter"), with
respect to the Company's Registration Statement on Form S-1, File No. 333-127385
(the "Registration Statement"). We are filing Amendment No. 4 to the
Registration Statement ("Amendment No. 4") in response to your Comment Letter.
The numbered paragraphs below restate the numbered paragraphs in the Comment
Letter in italics, and the discussion set out below each such paragraph is the
Company's response to the Staff's comment.

General

1.       Please withdraw your confidential treatment request filed on October 3,
         2000, control number 10457.

         The Company advises the Staff that it requested withdrawal of its
         confidential treatment request filed on October 3, 2000 on September
         20, 2005. Attached hereto as Annex 1 is a copy of the correspondence
         relating to the withdrawal.

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Securities and Exchange Commission
October 19, 2005
Page 2

Market opportunity. page 3.

2.       We note your response to prior comment number 4; however, the type of
         problems you experienced in the U.K. is unclear from the revision.
         Please revise your disclosure to describe the kind of problems (e.g.,
         financial losses, lack of order flow or lack of success in strategic
         plan) and refer the reader to your risk factor on page 15, "We
         recently revised our operational strategy for our U.K. operations."

         In response to the Staff's comment, the Company has revised the
         disclosure on page 4 to describe the kind of problems experienced by
         the Company and to refer the reader to its risk factor on page 15.

Recent Developments, page 5

3.       We note your response to prior comment number 5.  We do not see the
         cross reference on page 6 to your new discussion on the acquisitions
         section of the MD&A. Please revise.

         The cross reference previously added on page 6 incorrectly referenced
         the Business section. This has been corrected to reference the
         discussion in the acquisitions section of the MD&A.

Management's Discussion and Analysis

4.       Please refer to prior comment 11. We note that you are restructuring
         the U.K. operations in an attempt to make the operations profitable.
         Given the restructuring activity, please tell us how you have
         evaluated these potential costs with respect to the requirements of
         paragraph 3 SFAS 146.

         The Company has reviewed the guidance provided by paragraph 3 of SFAS
         146 and hereby confirms to you that the charges for the restructuring
         activities in our U.K. operations are being recorded in the proper
         periods. Paragraph 3 of SFAS 146 requires that "a liability for a cost
         associated with an exit or disposal activity shall be recognized and
         measured initially at its fair value in the period in which the
         liability is incurred." The liabilities that fall into this category
         for our restructuring were employee costs and certain, data and
         terminal costs. The employee costs were recognized when the decision
         was made to terminate the employees associated with a certain line of
         business or a certain department. The costs recognized were those
         required by local law, or those required under an associated data
         contract.

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Securities and Exchange Commission
October 19, 2005
Page 3

SAMCO Division and split off transaction. page 86,

5.       We note your response to prior comment number 20. Please provide a full
         explanation as to why you believe that a tax opinion is not necessary.

         The structure of the SAMCO split-off transaction was selected with the
         intention that it will provide the Penson stockholders with the
         opportunity to select whether or not to participate, and that it will
         be treated as a tax-free transaction. The Company discussed the
         requirements for a tax-free transaction with its tax advisors and
         reviewed these requirements in designing the structure. The Company
         believes the exposure from this transaction to the Company is small.
         This is because, even if the split-off were determined to be taxable,
         the taxable gain would be based on the excess of the value received
         over the Company's tax basis in the assets distributed. The assets to
         be distributed consist of cash and other assets with a book and tax
         value comparable to fair value. The fair market value of the other
         assets does not vary significantly from their tax basis. Accordingly,
         no tax opinion was sought. Disclosure regarding this analysis has been
         added to page 88.

Description of capital stock, page 91

6.       We note your response to comment 21, in which you indicate the
         preferred stock will be converted to common stock before the closing of
         the IPO. For purposes of transparency to the reader and support for the
         values assigned to the preferred shares, please revise this section to
         clearly disclose the rights, privileges, and conversion terms of this
         class of shares.

         In response to the Staff's comment, the Company has revised the
         discussion on pages 93-96 to clearly disclose the rights, privileges
         and conversion terms of its preferred shares.

Financial Statements

Statement of Operations. page F-4

7.       Please we note your supplemental response to prior comment 27. Please
         revise your description of the interest expense line items to clearly
         differentiate between the two types of interest expense. Moreover, it
         is still unclear why it is appropriate to present the amounts of your
         second interest expense outside of Income from continuing operations.
         Please revise or advise us.

         In response to the Staff's comment, the Company has revised its
         descriptions of interest expense to be "Interest expense on short term
         obligations" and "Interest

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Securities and Exchange Commission
October 19, 2005
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         expense on long term debt." Both of these expense categories are
         deducted prior to "Income from continuing operations."

Note 1: Summary of significant accounting policies

8.       Please tell us your rationale for the classification of changes in
         securities borrowed and securities loaned, which are collateralized
         financings, as operating cash flows. Refer us to the technical guidance
         you have considered.

         The Company has always included changes in securities borrowed and
         securities loaned as operating cash flows. Changes in these items occur
         based on customer activities that are a part of daily operations. For
         example, a customer decision to sell a security short, will cause the
         Company to borrow that security if the Company does not have that
         particular security available to sell short. The related change in the
         customer account is clearly an operating activity, so it makes sense
         that the securities borrowed that the customer triggered by this
         transaction would also be an operating activity. The Company believes
         that treating these items as a part of operating cash flows is
         established industry practice. The cash flow example on page 102 of the
         AICPA Broker Dealer Audit Guide shows the change in Net receivable from
         broker-dealers and clearing organizations as being classified in
         operating cash flows. In this example, Net receivable from
         broker-dealers and clearing organizations includes stock
         loaned/borrowed.

9.       We note your responses to prior comments 31 and 38 regarding your
         revenue recognition. Please tell us how you considered the guidance of
         paragraphs 7.15-7.23 in determining that recording revenues from
         clearing operations on a settlement date basis is appropriate for an
         entity subject to the AICPA Broker Dealer Audit Guide. Clearly explain
         to us how your policies comply with this literature or explain to us
         how you determined you were scoped out of this application. Please
         provide us with an analysis to support the fact that the use of
         settlement date revenue recognition for clearing broker-dealers is the
         generally accepted practice in the United States or revise your
         financial statements accordingly.

         The Company has reviewed the guidance provided by paragraphs 7.15 --
         7.23 of the AICPA Broker Dealer Audit Guide and has found nothing
         contained therein that is inconsistent with the use of settlement date
         accounting for the clearing business that is the primary business that
         the Company conducts. These paragraphs do not appear to address the
         limited business that the Company is in as a clearing broker. As a
         clearing broker, the Company is neither the purchaser nor the seller.
         The Company does not do any significant proprietary transactions, and
         if the Company does engage in proprietary transactions, they are
         recorded on a trade date basis. The Company does not do any significant
         agency transactions in

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Securities and Exchange Commission
October 19, 2005
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         the capacity of an introducing broker, and if the Company does engage
         in agency transactions, they are recorded on a trade date basis. The
         Company's primary business is providing the clearing services for other
         broker-dealers. In that capacity, the service that the Company earns
         revenue for cannot even begin until the trade date occurs. The Company
         earns what it calls "Clearing revenues" for processing the trades of
         other broker-dealers between the completion of the trade on trade date
         and the ultimate successful settlement of a trade on settlement date or
         thereafter if there is a fail. If the Company were to record revenues
         on a trade date basis in our clearing business, it would be recording
         revenues in advance of the performance of the services for which it
         earns clearing revenues. The Company believes this would not be
         appropriate revenue recognition.

         There are very few public companies for which clearing revenues are a
         significant portion of their business, and none for which it is the
         primary business. The largest one is Bear Stearns. Here is the
         applicable portion of their revenue recognition policy "Customer
         securities transactions are recorded on the Consolidated Statements of
         Financial Condition on a settlement date basis, which is generally
         three business days after trade date, while the related commission
         revenues and expenses are recorded on a trade date basis." A similar
         statement appears in the SWS Group, Inc. financial statements. As
         explained above, the Company does not have any significant commission
         revenues, so that portion of the policy is not applicable. These
         policies appear not to directly address the specific situation that we
         are in since these companies do significant non-clearing business.

         Although the Company believes that settlement date is the appropriate
         time to recognize revenues for their clearing business, they can change
         their policy to trade date if the Staff feels that this is required by
         the AICPA Broker Dealer Audit Guide in spite of the arguments to the
         contrary above. The Company has reviewed each of their reported
         periods, and has found that the change would not be significant in any
         period. It is industry practice to record clearing revenue on the books
         of the regulated entities on a settlement date basis (as required by
         the regulators), and make an adjustment, if material, to reflect
         revenues for a trade date basis. In this case, there would be no
         adjustments.

10.      Please revise to address the following regarding your response to our
         prior comment 35.

         -    Your response to comment 35 indicates that you believe none of
              your acquisitions was materially, either individually or in the
              aggregate. If true, please provide us with your detailed
              materiality analysis of each of these acquisitions. Such analysis
              should take into account that materiality may not necessarily be
              based solely on purchase price or the results of operations of

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Securities and Exchange Commission
October 19, 2005
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              the target. Other factors, including but not limited to the
              importance of personnel, technology, licenses, production
              capability, and business processes acquired should be considered.
              Otherwise, as previously requested, please revise your footnotes
              to briefly address these acquisitions pursuant to paragraphs 51-52
              of SFAS 141. Please revise your description of the line item
              "Acquisitions" to clearly state the nature of this line item. As
              well, please consider the guidance of paragraph 11 of SFAS 95 in
              evaluating the appropriateness of net versus gross presentation of
              the cash flows.

         -    Please disclose the variable factors which affect the purchase
              price of the CCS acquisition. Update your disclosures about this
              contingent consideration in future filings.

         As requested by the Staff, the Company has prepared the following
         analysis of each of its acquisitions completed during the periods shown
         in the F- pages. All revenue and income figures are approximate as
         there are monthly variations that need to be factored out in such an
         analysis. These represent the Company's estimate of the approximate
         average levels or revenues and net income (loss) as of the acquisition
         date. There was one acquisition completed in each year 2002, 2004 and
         2005.

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Securities and Exchange Commission
October 19, 2005
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                                                              2002            2004            2005
         Category                                          Acquisition    Acquisition      Acquisition
         --------                                          -----------    -----------      -----------
<S>                                                           <C>            <C>             <C>

         Monthly Revenue at time of acquisition               $0             $175k/mo        $100k
         Monthly Net (loss) income at time of acquisition     (-$200k)       (-$100k)        $40k
         Cost of Acquisition                                  $2.7 m         $3.6 m          $1.0 m
         Total Assets Acquired                                $3.5 m         $3.7 m