Chicago, IL – Russell R. Wasendorf, Sr., owner of Peregrine Financial Group Inc. (PFG), is facing federal fraud charges following a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) in the Northern District of Illinois on July 10, 2012.
The CFTC alleges that Wasendorf and PFG engaged in a scheme to defraud customers by misappropriating over $214 million in customer funds. The complaint details violations of customer fund segregation laws and the filing of false financial statements with the Commission. An audit by the National Futures Association (NFA) revealed that PFG falsely reported holding $220 million in customer funds when it actually held approximately $5.1 million as of July 2012.
According to the CFTC, the fraudulent activity spanned from at least February 2010 through July 2012. Wasendorf allegedly failed to maintain adequate customer funds in segregated accounts as mandated by the Commodity Exchange Act and CFTC Regulations. The company also allegedly made false statements regarding the amount of funds held in segregation for customers trading on U.S. Exchanges.
The case took a dramatic turn when Wasendorf attempted suicide on July 9, 2012. Following the attempt, NFA staff received information suggesting that Wasendorf had falsified bank records.
The CFTC is seeking a restraining order to freeze assets, appoint a receiver to manage PFG’s assets, and preserve records. The agency is also pursuing restitution for defrauded customers, disgorgement of ill-gotten gains, and civil monetary penalties. The amount of penalties sought has not been specified at this time.
The case is being prosecuted by William Janulis, Jon Kramer, Thaddeus Glotfelty, Melissa Glasbrenner, Rosemary Hollinger, Scott Williamson, and Richard Wagner of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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