The head of failed futures firm, Peregrine Financial Group Inc., Russell Wasendorf, was arrested and charged by the U.S. Federal Bureau of Investigation (FBI) on Friday.
Earlier this week, regulators brought allegations against Peregrine Financial, a registered futures commission merchant, and its owner, Wasendorf, alleging that they misappropriated customer funds, violated customer fund segregation laws, and made false statements in financial filings after an audit by the firm’s self-regulatory organization, the National Futures Association (NFA), found a US$200 million shortfall of customer funds.
Wasendorf, who survived a suicide attempt this week, has now been charged with making and using false statements in a complaint unsealed on Friday in U.S. District Court in Cedar Rapids, Iowa. The complaint alleges that, from 2010 through July 2012, Wasendorf made false statements to the U.S. Commodity Futures Trading Commission (CFTC) regarding the value of customer segregated funds held by his company. His first appearance in federal court is set for Friday afternoon.
In both this latest criminal case, and the regulatory case, the allegations have not been proven.
Canadian regulators have said that clients of the firm’s Canadian subsidiary are not affected by the regulatory action, or its bankruptcy petition, and that all client assets are accounted for.