Russell Wasendorf Sr., the founder of PFGBest brokerage firm (Peregrine Financial Group) attempted suicide after it was disclosed that more than $200 million is missing from clients’ accounts. Russell Wasendorf Sr. was found in his car near his company’s Iowa headquarters and is in critical condition at the University of Iowa Hospital, according to media reports. Wasendorf, a former journalist and trader, is reportedly in a coma.
Wasendorf’s suicide attempt came hours before the National Futures Association (NFA) said it had issued an emergency order to in effect freeze PFGBest’s operations after finding that a US bank account the broker said contained $225 million in customer funds actually held only $5 million, the Guardian reports. “It appears that PFG does not have sufficient assets to meet its obligations to its customers,” the NFA said.
An alleged fraud and misappropriation of customer funds by futures merchant Peregrine Financial Group Inc. started more than two years ago, according to a lawsuit filed Tuesday by federal regulators.
The Commodity Futures Trading Commission accused Peregrine Financial and its chief executive, Russell Wasendorf Sr., of fraud, customer funds violations and making false statements. The news comes less than a year after the collapse of MF Global Holdings Ltd. and is raising new questions about government oversight of how futures firms manage customer cash. Source: Wall Street Journal
Still think that these companies don’t need regulation to avoid customers being ripped off? SMH. Of course, Sen. Chuck Grassley (R-IA) believes the government should take a wait-and-see attitude, saying it’s “premature to start talking about an indemnity fund or changes to the law,” Reuters reports. Um, why am I not surprised a Republican lawmaker would take this position? Does the near financial collapse on Wall Street ring a bell?