August 9, 2022
Fargo, US 80 F

CFTC files lawsuit against Peregrine Financial Group

A lawsuit was filed yesterday by the Commodities Futures Trading Commission against Peregrine Financial Group. PFG is a brokerage firm based in Cedar Falls, Iowa and Chicago. The CFTC alleged that PFG failed to segregate customer funds and falsified documents and committed fraud.

The CFTC says that roughly $200 million of customer funds are missing. The shortfall was discovered Monday, after PFG’s owner and founder, Russell Wasendorf Sr., was taken to the hospital after an apparent suicide attempt. While PFG made its segregated account appear as if it held close to $225 million, the balance was actually only $5.1 million, according to CFTC’s lawsuit.

The National Future Association was notified that Wasendorf may have falsified documents and shortly after issued a notice. All open customer positions were liquidated by Jefferies Group Inc., PFG’s clearing firm, but customer’s are unable to withdraw their assets. Meanwhile, the CFTC has asked the court to appoint a receiver to take over the business, and has also requested a restraining order against the firm’s principal operators.

The amount of PFG’s business that was agriculture related or how many clients’ funds were involved is still unclear.

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