LOS ANGELES — It feels like doomsday at mid-size Iowa futures brokerage PFGBest, where $220 million in customer funds has gone missing, federal regulators have filed suit, accounts have been frozen and the company’s chief executive attempted suicide Monday.
LOS ANGELES — It feels like doomsday at mid-size Iowa futures brokerage PFGBest, where $220 million in customer funds has gone missing, federal regulators have filed suit, accounts have been frozen and the company’s chief executive attempted suicide Monday.
Less than a year after Wall Street brokerage MF Global imploded under similarly suspicious circumstances, the National Futures Association said it took “emergency enforcement action” against PFGBest parent Peregrine Financial Group Inc. and its Peregrine Asset Management Inc. unit.
The regulatory body said it “has reason to believe that PFG does not have sufficient assets to meet its obligations to its customers.” The brokerage was blocked from trading and allowed only to liquidate existing customer positions.
Federal regulators on Tuesday sued Peregrine Financial Group and CEO Russell R. Wasendorf Sr., alleging fraud committed by misappropriating customer funds and falsifying financial statements.
The complaint from the Commodity Futures Trading Commission was filed in Illinois and claims that since February 2010, PFG and Wasendorf didn’t keep the required amount of customer funds in segregated accounts.
The FBI is also looking into the company.
Late Monday, the Cedar Falls, Iowa, and Chicago-based firm said it was investigating “some account irregularities.”
The company also said in a statement that Wasendorf, its chief executive, founder and chairman, was involved in “a recent emergency,” which it then characterized as “a suicide attempt.”
As recently as June 29, PFG had reported to regulators that it had $225 million in customer funds deposited at U.S. Bank.
But on Monday, the National Futures Association received a tip that Wasendorf may have falsified bank records and found that, just days earlier, PFG had only $5 million in the bank.