What is the google 950 penalty? A website or page suddenly drops to the last page of google results, a loss of approximately 950 places, hence the term "950 penalty"
Does the penalty actually exist? Absolutely yes. A website does not drop to the last page because it has suddenly become less important or relevant than all the websites that havent dropped. It drops to the last page because it has been penalized.
Why is the penalty applied to a website? Google isnt saying anything, so nobody knows for sure. Our guess would be that the most likely explanation is that the website does not follow the google webmaster guidelines, or has triggered some kind of spam filter. But we can only guess at this stage.