{"id":5324,"date":"2012-07-26T00:00:00","date_gmt":"2012-07-26T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/07\/peregrine_financial_group_were"},"modified":"2022-04-28T13:26:53","modified_gmt":"2022-04-28T18:26:53","slug":"peregrine-financial-group-were","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/","title":{"rendered":"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler"},"content":{"rendered":"<p>According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by the system, which neglected to protect them. Peregrine\u2019s owner Russell R. Wasendorf Sr. is accused of embezzling close to $220M and defrauding clients. You can read an earlier post written by our investment fraud law firm about the CFTC\u2019s lawsuit against Peregrine and Wasendorf on our site.<\/p>\n<p>Per the Regulator\u2019s securities case, the futures commission merchant and Wasendorf allegedly misappropriate client monies and submitted untrue statements in the financial statements they turned in to the CFTC. They also are accused of misrepresenting, during a National Futures Association audit, that Peregrine held over $200M in client funds when that figure was actually close to around $5.1 million. The regulator is not sure what happened to the rest of the money and is accusing both Wasendorf and the futures commission merchant of violating fund segregation laws with their alleged intentional deception of the NFA.<\/p>\n<p>Gensler says that the CFTC will look at how NFA handles its responsibilities as they relate to the FCM and whether the CFTC does a good job in regulating the SRO. However, while noting during testimony front of the Senate Agriculture Committee on July 17 that the allegations against Wasendorf and Peregrine, if true, are crimes, he said that is not possible for market regulators to \u201cprevent all financial fraud.\u201d Gensler also talked about how the SRO system is part of the Commodity Exchange Act but that the CFTC doesn\u2019t have enough funds to act as front-line regulator over the NFA, which is funded by dues.<\/p>\n<p>The CFTC will review how NFA dealt with Peregrine examinations. NFA has hired a law firm to conduct its own review of audit procedures and practices, particularly those involving the exams for Peregrine.<\/p>\n<p>Meantime, Peregrine\u2019s bankruptcy trustee, Ira Bodenstein, has retained forensic accountants from PricewaterhouseCoopers to assist in determining how much of customers\u2019 money is left. These clients have expressed frustration at the delays in their being able to recover even some of their funds. According to Michael Eidelman, who is the receiver for the assets of Wasendorf, a portion of the missing cash may be in property that can be sold so that some Peregrine customers can get their money back. (These clients haven\u2019t tried to sell their claims against Peregrine because they still don\u2019t know the extent of the firm\u2019s liabilities and assets.)<\/p>\n<p>The Peregrine securities fraud was confirmed after Wasendorf tried to kill himself on July 9. In his suicide note, he talked about how he bilked clients of over $100 million during a period lasting close to 20 years. He admitted that he used a rented PO box, inkjet printers, and Photoshop software to execute his scam. He also forged documents to hide the missing funds.<\/p>\n<p><a href=\"https:\/\/online.wsj.com\/article\/SB10001424052702304022004577518680956762826\"><br \/>\nScandal Shakes Trading Firm,<\/a> The Wall Street Journal, July 11, 2012<\/p>\n<p><strong>More Blog Posts:<\/strong><\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2012\/07\/secs_bid_to_get_stanford_ponzi\">Texas Securities: SEC\u2019s Bid To Get Stanford Ponzi Scam Victims SIPC Coverage is Denied by District Court<\/a>, Stockbroker Fraud Blog, July 9, 2012<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/#more-5324\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by the system, which neglected to protect them. Peregrine\u2019s owner Russell R. Wasendorf Sr. is accused of embezzling close to $220M and defrauding clients. You can read an earlier post written by our investment [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3810,4029],"tags":[],"class_list":["post-5324","post","type-post","status-publish","format-standard","hentry","category-cftc","category-peregrine-financial-group"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler &#8212; Investor Lawyers Blog &#8212; July 26, 2012<\/title>\n<meta name=\"description\" content=\"According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by &#8212; July 26, 2012\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler &#8212; Investor Lawyers Blog &#8212; July 26, 2012\" \/>\n<meta name=\"twitter:description\" content=\"According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by &#8212; July 26, 2012\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler &#8212; Investor Lawyers Blog &#8212; July 26, 2012","description":"According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by &#8212; July 26, 2012","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/","twitter_card":"summary_large_image","twitter_title":"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler &#8212; Investor Lawyers Blog &#8212; July 26, 2012","twitter_description":"According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by &#8212; July 26, 2012","twitter_misc":{"Written by":"Shepherd Smith Edwards &amp; Kantas, LLP","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/#article","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/"},"author":{"name":"Shepherd Smith Edwards &amp; Kantas, LLP","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"headline":"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler","datePublished":"2012-07-26T05:00:00+00:00","dateModified":"2022-04-28T18:26:53+00:00","mainEntityOfPage":{"@id":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/"},"wordCount":551,"articleSection":["CFTC","Peregrine Financial Group"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/","url":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/","name":"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler &#8212; Investor Lawyers Blog &#8212; July 26, 2012","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#website"},"datePublished":"2012-07-26T05:00:00+00:00","dateModified":"2022-04-28T18:26:53+00:00","author":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"description":"According to Commodity Futures Trading Commission Chairman Gary Gensler, the customers of Peregrine Financial Group, also called PFG Best, were failed by &#8212; July 26, 2012","breadcrumb":{"@id":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.investorlawyers.com\/blog\/peregrine-financial-group-were\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.investorlawyers.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Peregrine Financial Group Customers Were Victims of the \u201cSystem,\u201d Says CFTC Chairman Gensler"}]},{"@type":"WebSite","@id":"https:\/\/www.investorlawyers.com\/blog\/#website","url":"https:\/\/www.investorlawyers.com\/blog\/","name":"Investor Lawyers Blog","description":"Published By Investment Fraud Attorneys \u2014 Shepherd Smith Edwards &amp; Kantas, LLP","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.investorlawyers.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431","name":"Shepherd Smith Edwards &amp; Kantas, LLP","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","caption":"Shepherd Smith Edwards &amp; Kantas, LLP"},"sameAs":["https:\/\/www.investorlawyers.com\/"]}]}},"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pedX9K-1nS","_links":{"self":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5324","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=5324"}],"version-history":[{"count":8,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5324\/revisions"}],"predecessor-version":[{"id":26919,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/5324\/revisions\/26919"}],"wp:attachment":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=5324"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=5324"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=5324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}