U.S. Bank investigated in Peregrine case

July 11, 2012 at 8:17 PM   |   0 comments

CHICAGO, July 11 (UPI) -- Investigator are looking into U.S. Bank's role in overseeing client funds for Peregrine Financial Group, officials said Wednesday.

U.S. regulators are investigating the alleged disappearance of $215 million from Peregrine, a futures trading firm based in Iowa that does most of its business out of Chicago.

The Wall Street Journal said Peregrine maintained an account holding client funds at a U.S. Bank branch near the firm's headquarters in Cedar Falls. Authorities are checking to see whether Peregrine founder Russell Wasendorf Sr. supplied fake documents to the bank to hide illicit use of his clients' money, the newspaper said.

Regulators are also looking into the potential role of a U.S. Bank employee whose name and signature Wasendorf may have used.

U.S. Bancorp, parent to U.S. Bank, said the bank is cooperating fully with authorities, the Journal reported.

Peregrine filed for bankruptcy Tuesday in Chicago after the Commodity Futures Trading Commission filed a lawsuit in federal court, accusing Peregrine and Wasendorf of fraud, customer-funds violations and making false statements. The accounts of brokerage and retail customers were frozen.

Wasendorf, 64, attempted suicide Monday in Cedar Falls. Police said they found him in his car outside the company's headquarters with a hose running from the car's tailpipe.

Wasendorf's condition as of Wednesday was unavailable, the Journal said.

The newspaper said Wasendorf's son, Russell Wasendorf Jr., who serves as the company's president, told employees Monday his father had left note alluding to a crime.

Peregrine listed estimated assets of $500 million and $1 billion, and liabilities of $100 million and $500 million, the bankruptcy court filing said.

Many of PFGBest's clients are farmers and other individual investors who place trades through the firm's brokerage on commodities and currency markets, the Journal said.

Public records show Wasendorf Sr., was married two weeks ago in Las Vegas, two months before a planned wedding.

Wasendorf Jr., was given power of attorney July 3 to act on his father's behalf, bankruptcy court filings showed. The Journal said it was not clear whether there is any connection between the wedding and the power of attorney action.

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