Edward L. Walter and Jamie K. Walter - Page 6

                                         -6-                                          
          agreement).  The PJ account agreement stated, in part, that                 
          petitioner’s account included a “ready purchase credit feature”.            
          That feature allowed petitioner to purchase securities on credit            
          of up to 50 percent of the current market value of eligible                 
          securities in his account.  If petitioner used this feature, any            
          securities in his Piper Jaffray account became collateral for the           
          extended credit and, in the event of a default by petitioner in             
          repaying the extension of credit, could be sold by Piper Jaffray            
          to reduce or to liquidate entirely any debit balances in his                
          account.                                                                    
               As to any order that petitioner placed with Piper Jaffray              
          for the purchase of securities, the PJ account agreement stated:            
               When I buy securities, you will first apply any cash in                
               my Account on the settlement date to pay for the                       
               purchase.  If there is insufficient cash, you will then                
               redeem Fund shares at net asset value to pay the amount                
               due.                                                                   
                    If there are not enough Fund shares in the Account                
               to pay this amount, the trade will be treated as a                     
               credit transaction.  You may extend credit to me on the                
               terms and conditions set forth in this Agreement.  Any                 
               credit you extend to me will be automatically                          
               collateralized by eligible securities in my account.                   
               If there are not sufficient eligible securities in the                 
               Account, I must deposit additional cash or eligible                    
               securities into my Account within the timeframes                       
               required by regulations and your policies.  If cash or                 
               eligible securities are not deposited on time, you may                 
               liquidate the securities at market risk and exposure to                
               me.                                                                    









Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011