Complaint Filed Against Peregrine Financial Group, More Than $200 Million Reported Missing

By Jeff Reinitz & Jon Ericson, The Waterloo-Cedar Falls Courier

Russ Wasendorf, sr. Monday, April. 4, 2011. (RICK CHASE / Courier Staff Photographer)

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By Ellen Kurt

Story Created: Jul 9, 2012 at 11:46 PM CDT

Story Updated: Jul 10, 2012 at 1:38 PM CDT

CEDAR FALLS, Iowa - The U.S. Commodity Futures Trading Commission has filed a complaint against Peregrine Financial Group Inc. of Cedar Falls and its owner, Russell R. Wasendorf Sr.

The action came a day after Wasendorf, 64, allegedly attempted to take his own life and another regulatory arm, the National Futures Association, took action against the company.

Officials said Wasendorf was taken to University of Iowa Hospitals and Clinics in Iowa City, and his condition wasn’t available. Court records filed Tuesday stated he is believed to be in a coma as a result of the attempt.

The CFTC complaint alleges that 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.

It was filed Tuesday in U.S. District Court for the Northern District of Illinois.

The CFTC seeks a restraining order to freeze assets, appoint a receiver and preserve records. Further, the litigation seeks restitution, and civil monetary penalties.

The commission alleges PFG falsely represented that it held in excess of $220 million of customer funds during an NFA audit when in fact it held approximately $5.1 million.

CFTC alleges that beginning in at least February 2010, PFG and Wasendorf failed to maintain adequate customer funds in segregated accounts as required by the Commodity Exchange Act and CFTC Regulations.

The Complaint further alleges that defendants made false statements in filings required by the Commission regarding funds held in segregation for customers trading on U.S. Exchanges.

According to the Complaint, Wasendorf attempted to commit suicide yesterday, July 9, 2012. In the aftermath of that incident, the staff of the NFA received information that Wasendorf may have falsified certain bank records.