According to BusinessInsider the big topic within the
finance community this morning is the suspension of Iowa-based brokerage firm
PFGBest and Chicago-based investment funds Peregrine Financial Group and
Peregrine Asset Management — all controlled by online trading pioneer Russel R.
Wasendorf Sr., according to Bloomberg's Matthew Leising — after regulators
discovered a $200 million cash shortfall in the two latter firms' customer
accounts.
At the same time, Wasendorf apparently tried to commit
suicide (unsuccessfully). The matter of
the missing money sounds eerily similar to what happened last year with MF
Global. What's even more weird:
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.' "
According to the formal complaint from Peregrine's regulator
the National Futures Association, the fund reported yesterday it had $400
million in customer accounts, of which $225 million were deposited at U.S.
Bank. But the NFA discovered there was actually only $5 million on
deposit there. PFGBest, the brokerage,
released a somewhat enigmatic statement about its status, "Due to a recent
emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some
accounting irregularities are being investigated regarding company
accounts."
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