{"id":5330,"date":"2012-07-10T00:00:00","date_gmt":"2012-07-10T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/07\/cftc_accuses_peregrine_financi"},"modified":"2022-09-27T21:27:59","modified_gmt":"2022-09-28T02:27:59","slug":"cftc-accuses-peregrine-financi","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/cftc-accuses-peregrine-financi\/","title":{"rendered":"CFTC Accuses Peregrine Financial Group of Securities Fraud Related to $200M Customer Funds Shortfall"},"content":{"rendered":"

The CFTC is accusing Peregrine Financial Group and its owner Russell R. Wasendorf, Sr. of misappropriating client monies, including statements that were untrue in financial statements submitted to the CFTC, and violating customer fund segregation laws. The Commission filed its securities fraud <\/a>complaint against the registered futures commission merchant in the United States District Court for the Northern District of Illinois.<\/p>\n

Per the CFTC\u2019s complaint, during an audit by the National Futures Association, Peregrine misrepresented that it was holding more than $200M of client funds when it only held about $5.1M. The regulator says that the whereabouts of this at least $200 million in customer fund shortfall are not known at this time. In the wake of the allegations, Peregrine has told its clients that it was being investigated for \u201caccounting irregularities.\u201d<\/p>\n

The Commission contends that beginning at least 2\/2010 until now, Peregrine and Wasendorf did not meet CFTC Regulations and the Commodity Exchange Act by not maintaining enough client money in accounts that were segregated. The brokerage and its owner also are accused of making false statements about the funds that were being segregated for clients that were trading on US Exchanges in required filings.<\/p>\n

Wasendorf, who reportedly tried to kill himself on Monday is now in a coma. The NFA just recently was given information that he may have been responsible for a number of falsified bank records.<\/p>\n

The CFTC wants a restraining order to preserve records, freeze assets,, and establish a receiver. It is seeking disgorgement, restitution, financial penalties, and other appropriate financial relief.<\/p>\n

Yesterday, Peregrine\u2019s clearing broker Jefferies Group Inc. said that it had started unloading positions held for the futures brokerage\u2019s clients after a margin call was not met. Jeffries Group doesn\u2019t expect to sustain losses.<\/p>\n

Meantime, the NFA and \u201cother officials, have frozen all customer funds and Peregrine is not allowed to accept or solicit new client funds or accounts or make trades for customers unless it involves liquidating positions or distributing their money. Also looking into this financial matter is the US Federal Bureau of Investigation.<\/p>\n

It was just this year that a court-appointed receiver in Minnesota sued Peregrine over allegedly disregarding warning signs that the futures brokerage\u2019s client Trevor Cook was running a Ponzi scam. According to the securities lawsuit, investments by Cook and others with Peregrine that were supposedly profitable sustained over $30 million in losses as the allegedly culpable participants moved about $48 million from clients to Peregrine accounts.<\/p>\n

According to Fox Business, the fallout from these latest allegations against Peregrine could be bigger than the MF Global collapse as traders blame regulators for not doing enough and industry members fight to recapture investor confidence.
\n
\nCFTC Files Complaint Against Peregrine Financial Group, Inc. and Russell R. Wasendorf, Sr. Alleging Fraud, Misappropriation of Customer Funds, Violation of Customer Fund Segregation Laws, and Making False Statements<\/a>, CFTC, July 10, 2012<\/p>\n

Peregrine Financial Allegedly Has $200 Million Shortfall, Bloomberg, July 10, 2012<\/p>\n

PFG Scandal Deepens as CFTC Files Claim<\/a>, Fox Business News\/Reuters, July 10, 2012<\/p>\n

More Blog Posts:<\/strong>
\nABA Presses for Self-Funding for SEC and CFTC, Institutional Investor Securities Blog, May 31, 2012<\/p>\n

CFTC and SEC May Need to Work Out Key Differences Related to Over-the-Counter Derivatives Rulemaking, Institutional Investor Securities Blog, January 31, 2012<\/p>\n

SEC and CFTC Say They Found Out About JPMorgan\u2019s $2B Trading Loss Through Media<\/a>, Institutional Investor Securities Blog, May 31, 2012<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The CFTC is accusing Peregrine Financial Group and its owner Russell R. Wasendorf, Sr. of misappropriating client monies, including statements that were untrue in financial statements submitted to the CFTC, and violating customer fund segregation laws. The Commission filed its securities fraud complaint against the registered futures commission merchant in the United States District Court […]<\/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":[3810,3752,4005,4029,3741],"tags":[],"class_list":["post-5330","post","type-post","status-publish","format-standard","hentry","category-cftc","category-financial-firms","category-misrepresentations-and-omissio","category-peregrine-financial-group","category-securities-fraud"],"yoast_head":"\nCFTC Accuses Peregrine Financial Group of Securities Fraud Related to $200M Customer Funds Shortfall — Investor Lawyers Blog — July 10, 2012<\/title>\n<meta name=\"description\" content=\"The CFTC is accusing Peregrine Financial Group and its owner Russell R. 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