CFTC Files Fraud Charges Against Peregrine Financial Group, Inc. and Russell R. Wasendorf, Sr.

CFTC v. Peregrine Financial Group, Inc., et al., Case No. 1:12-cv-05383 (N.D. Ill.)  On July 10, 2012, the CFTC filed a complaint against Peregrine Financial Group, Inc. (“PFG”), a registered futures commission merchant, and its owner, Russell R. Wasendorf, Sr.  The CFTC alleges PFG and Wasendorf committed fraud by misappropriating customer funds, violated customer fund segregation laws, and made false statements in financial statements.

From at least February 2010 through the present, PFG and Russell R. Wasendorf, Sr., PFG’s chief executive officer and sole owner, failed to maintain adequate customer funds in segregated accounts.  PFG falsely represented that it held in excess of $220 million of customer funds when it only had $5.1 million.  In addition, defendants made false statements in filings required by the CFTC regarding funds held in segregation for customers trading on U.S. Exchanges.  PFG and Wasendorf also used customer funds for purposes other than those intended by its customers, and consequently, have misappropriated these funds.  The whereabouts of the funds is currently unknown.

On July 9, 2012, Wasendorf attempted to commit suicide.  During the aftermath of that incident, the NFA received information Wasendorf may have falsified bank records.  The CFTC seeks a restraining order to freeze assets, appoint a receiver and preserve records.  The litigation also seeks restitution, disgorgement, and civil monetary penalties.

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