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Peregrine accused in federal complaint

July 10, 2012 at 2:29 PM   |   Comments

CHICAGO, July 10 (UPI) -- Peregrine Financial Group is under federal investigation after a $200 million shortfall in customer accounts was discovered, U.S. regulators said.

The U.S. Commodity Futures Trading Commission announced Tuesday it filed a complaint in federal court in Chicago against Peregrine and its owner, Russell R. Wasendorf Sr.

The complaint alleges PFG and Wasendorf committed fraud by misappropriating customer funds, violated customer fund segregation laws and made false statements in financial statements filed with the commission.

The National Futures Association took emergency enforcement action Monday against PFG after it learned of the shortfalls.

"PFG has failed to demonstrate that it meets capital requirements and segregated funds requirements," the independent regulatory agency said in Monday in a release. "NFA also has reason to believe that PFG does not have sufficient assets to meet its obligations to its customers."

The futures trading commission said PFG falsely represented that it held in excess of $220 million of customer funds when, in fact, it held about $5.1 million.

The federal agency said Wasendorf attempted to commit suicide Monday. In the aftermath of that incident, the staff of the NFA received information that Wasendorf may have falsified certain bank records, the agency said.

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