According to a Businessweek/Bloomberg report: Just when you
figured the details of the Peregrine fraud case couldn’t get any worse,
evidence is emerging that not only paints regulators as even more inept than
first suspected, but also indicates that officers at the Iowa-based futures
brokerage had reason to believe their boss was stealing customer money. For those who haven’t been following the
case, here’s a primer: Peregrine Financial Group’s chief executive, Russell
Wasendorf, allegedly duped regulators for 20 years through an elaborate scheme
in which he forged bank documents, faked e-mails, and set up a bogus bank
address at a post office box. This allowed him allegedly to steal hundreds of
millions of dollars of his customers’ money, some of which he spent on a
state-of-the art, $18 million headquarters built in 2009. Wasendorf, 64, has been charged with lying to
regulators and is being held in U.S. custody pending a bail hearing this month.
He has been sued by several customers for allegedly stealing more than $200
million in client money. On July 9 he tried to asphyxiate himself by parking
his Chevrolet Cavalier behind his office in Cedar Falls and running a hose from
the tailpipe into the car. He survived after a passerby discovered him and
called 911.
On Wednesday, the Senate Agriculture Committee held its
latest hearing on the Peregrine and MF Global cases that have shaken confidence
in the futures market. Harkin asked CFTC Chairman Gary Gensler if his agency,
which is charged with overseeing the NFA, was aware of the 2011 incident which
Roth laid out in his letter. Gensler indicated that to his knowledge, it was
not, replying that “We don’t review NFA audits.”
“There should’ve been some questions asked at the very
least,” Harkin said in a phone interview afterward…..
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