Earlier, we told you about an Iowa-based brokerage CEO who’d been hospitalized after attempting suicide, prompting the National Futures Association to investigate account irregularities at his firm.
Now, via ZeroHedge, we have the details of the complaint: The NFA claims that at a fund wholly owned and directed by the CEO, Russ Wasendorf, executives may have lied about a $220 million shortfall in customer segregated accounts.
Peregrine Financial Group Inc., which Bloomberg’s Matthew Leising reports is owned by Iowa-based PFGBest’s Russ Wasendorf, was required to maintain $400 million in segregated funds as of July 6, according to the complaint, from the National Futures Association, PFG’s regulator.
Then, today, per the complaint:
“NFA made an inquiry with U.S. Bank and learned that rather than the $225 million that PFG had reported being on deposit at U.S. bank just days earlier, PFG had only approximately $5 million on deposit at U.S. Bank.”
The NFA also found PFG’s $200 million shortfall may date back as far as February 2010.
PFG has been suspended from all trading activity.
The complaint does not cite Wasendorf by name.
Earlier this year, PFG was sued after ignoring signs one of its customers had been running a Ponzi scheme, Leising writes, adding that the CFTC is also investigating.
The Wall Street Journal is also citing a compay spokesman saying ” ’employees across the United States’ are at risk of losing their jobs.”
Even stranger: Wasendorf was interviewed by PBS in December about the missing funds at MF Global:
” ‘Every single day [a futures commission merchant] must file a segregated report. On Friday, prior to the (MF Global bankruptcy) everything was fine, on Monday the bells went off,’ according to Russ Wasendorf, Sr., founder of FCM PFGBest.
“Speaking on PBS Nightly Business report, Wasendorf, a former NFA board member, offered one potential opinion on the case of the disappearing $600 million: ‘Something happened in the middle of that time. Futures regulations work just fine. Once the money was transferred it went into a new regulatory environment, probably covered by banking rules, which supersede the regulations of the futures industry.’ “