National media spotlight on PFG Best fallout - KWWL - Eastern Iowa Breaking News, Weather, Closings

National media spotlight on PFG Best fallout


Just three days before employees learned they were out of a job, Russ Wasendorf Junior sent an email to company employees saying PFG Best was on track for a more secure future. On the following Monday, his father attempted suicide and federal authorities began an investigation into Peregrine Financial Group.

The fall of PFG Best has caught the attention of the national media.

CNBC's Senior Correspondent, Scott Cohn, has been following this story since it broke. Cohn is an expert in futures trading.

He says Peregrine Financial Group is a future brokerage that helps customers, which are mostly farmers, hedge the prices of crops, like corn or wheat. The farmers give their money to peregrine and ask the brokerage for advice and help in betting that the future price of corn, or wheat, or any other commodity will go up or down.

Besides these future contracts, these investors sometimes leave money in brokerage accounts or a cash accounts.

"It seems as though there's a question about that money if the company was using that money which it is not allowed to do in most circumstances and that's now what they're looking into and that's the $200 million that's missing," said Cohn.

The impact from the fall of PFG Best was felt immediately and Cohn says it could be felt for a long time.

"If the money's been spent, it's going to be difficult to get back quickly so the investors will be hurt and clearly the employees who now with everything frozen they're maybe out of a job. The maybe at least not getting paid. There's a whole lot that needs to be sorted out here," said Cohn.

Cohn also says this story is different for other financial collapses.

"The circumstances surrounding this when the CEO attempted suicide and there were so many maneuvers that were going on before hand, that's something we're still trying to get our minds around," said Cohn.

Peregrine employees took a 10 percent pay cut back in may and had been asked to take another pay cut this month, but were told everything was okay.

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