UPDATE: $200 million reported missing from PFG - KWWL - Eastern Iowa Breaking News, Weather, Closings

UPDATE: $200 million reported missing from Peregrine Financial Group

Posted: Updated:
Russ Wasendorf, Sr. Russ Wasendorf, Sr.
CEDAR FALLS (KWWL) -

Peregrine Financial Group filed for Chapter 7 bankruptcy late Tuesday in U.S. Bankruptcy court in Chicago.

It's the latest development, triggered by the attempted suicide of Peregrine Financial Group founder and owner, Russell Wasendorf, Sr. 

The bankruptcy petition is signed by Russ Wasendorf, Jr. He is President of the company and the son of Russ Wasendorf, Sr. The younger Wasendorf had been given Power of Attorney July 3, six days before his father's suicide attempt.

The U.S. Commodity and Futures Trading Commission filed a complaint against Peregrine Financial Group and its owner Russell Wasendorf, Sr., alleging fraud, misappropriation of customer funds, violation of customer fund segregation laws, and making false statements. It alleges more than $200 million is missing.

"The whereabouts of the funds is currently unknown," says a lawsuit filed Tuesday by the U.S. Commodity Futures Trading Commission against Peregrine Financial Group of Cedar Falls.

The complaint comes just one day after Peregrine Financial Group founder and owner, Russ Wasendorf, Sr., attempted suicide in a vehicle near his company headquarters in Cedar Falls.

The official Black Hawk County Sheriff's Department incident report says Wasendorf was inside his vehicle when paramedics arrived on the scene in a wooded area behind the Peregrine headquarters.

The incident report says the engine was running on the vehicle and one end of a hose had been attached to the exhaust and the other one placed inside the vehicle. Wasendorf was breathing, but incoherent when transported to Sartori Memorial Hospital and later air lifted to University of Iowa Hospital and Clinics in Iowa City.

The Sheriff's Department report says Wasendorf left a suicide note which indicated possible discrepancies with accounts at Peregrine Financial group. That information was then forwarded to the Federal Bureau of Investigation field office in Waterloo. Sandy Breault, FBI spokeswoman in Omaha, said Tuesday that the FBI has launched an investigation into activities at Peregrine. 

The company's Cedar Falls headquarters was virtually empty Monday afternoon except for emergency vehicles parked outside.  Black Hawk County Sheriff Tony Thompson says it is for security reasons.

The National Futures Association, a self-regulatory organization for the U.S. futures industry, announced Monday it has put all PFG funds on hold until further notice. The NFA is responsible for monitoring and auditing PFG for compliance with financial and reporting requirements. The NFA says it has reason to believe PFG "does not have sufficient assets to meet its obligations to its customers." According to the NFA, PFG reported it had $225 million in customer segregated funds, but U.S. Bank reported to NFA that the company only had $5 million on deposit at the bank. PFG customers are currently not able to trade, only to liquidate accounts.

Peregrine Financial Group, parent company of PFGBest, was fined $700,000 in February by the National Futures Associations for failing to supervise four of its brokers. The complaints allege the brokers made deceptive sales solicitations.

My Verona, an Italian restaurant owned by Wasendorf in Cedar Falls, closed on Tuesday. The General Manager of the restaurant says she was notified on Tuesday of the closure and is working to inform employees. She didn't know if it would reopen in the future.

Peregrine Charities 2012 Triathlon has also been canceled this year. It was scheduled to take place Aug. 19. Peregrine Charities is a grant-making family foundation, created by Wasendorf, that supports medical research for rare pediatric diseases. Since 2004 the charity has given around $1.5 million to eastern Iowa hospitals

 

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