Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

A Member of the Law Professor Blogs Network

Tuesday, July 10, 2012

CFTC Sues Peregrine Financial Group After Owner Attempts Suicide

The latest scandal in the commodities industry involves Peregrine Financial Group and its owner Russell Wasendorf.  The CFTC announced today that it filed a complaint against Peregrine Financial Group Inc. (PFG), a registered futures commission merchant, and its owner, Russell R. Wasendorf, Sr. (Wasendorf).  The Complaint alleges that PFG and Wasendorf committed fraud by misappropriating customer funds, violated customer fund segregation laws, and made false statements in financial statements filed with the Commission. 

The National Futures Association (NFA) is PFG’s Designated Self-Regulatory Organization and is responsible for monitoring and auditing PFG for compliance with the minimum financial and related reporting requirements. According to the Complaint, in July 2012 during an NFA audit, PFG falsely represented that it held in excess of $220 million of customer funds when in fact it held approximately $5.1 million.

The Commission’s action alleges that from at least February 2010 through the present, PFG and Wasendorf failed to maintain adequate customer funds in segregated accounts as required by the Commodity Exchange Act and CFTC Regulations.  The Complaint further alleges that defendants made false statements in filings required by the Commission regarding funds held in segregation for customers trading on U.S. Exchanges. 

According to the Complaint, Wasendorf attempted to commit suicide yesterday, July 9, 2012.  In the aftermath of that incident, the staff of the NFA received information that Wasendorf may have falsified certain bank records.

The Wall St. Journal reports that the FBI has also opened an investigation.  WSJ, CFTC Sues Peregrine Financial Group

http://lawprofessors.typepad.com/securities/2012/07/cftc-sues-peregrine-financial-group-after-owner-attempts-suicide.html

News Stories, Other Regulatory Action | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef01774337b0e1970d

Listed below are links to weblogs that reference CFTC Sues Peregrine Financial Group After Owner Attempts Suicide:

Comments

Post a comment