U.S. Bank now faces charges in Wasendorf saga - KWWL - Eastern Iowa Breaking News, Weather, Closings

U.S. Bank now faces charges in Wasendorf saga

Posted: Updated:

The U.S. Commodity Futures Trading Commission has filed a complaint against U.S. Bank, after last summer's financial scandal involving the head of Peregrine Financial Group, based in Cedar Falls.

The complaint alleges the bank knew it was handling money "not for the benefit of Peregrine's customers."  The CFTC complaint accuses U.S. Bank of unlawfully using and holding Peregrine's customer segregated funds.

The complaint states from approximately September 2008 to July 2012, U.S. Bank unlawfully accepted Peregrine's customers' funds as security on loans it made to PFG CEO Russ Wasendorf, Sr., his wife, and his construction company to build an office complex for Peregrine in Cedar Falls.

The complaint also says from approximately June 2008 to July 2012, U.S. Bank improperly held Peregrine's customers' funds in an account treated as Peregrine's commercial checking account and knowingly handled Wasendorf's transfers of millions of dollars of customers' funds out of this account to pay for things like a private jet, the myVerona restaurant, and divorce settlement.

In a statement, David Meister, the CFTC's Director of Enforcement, said, "The Commodity Exchange Act and Commission rules protecting customer funds impose obligations on banks that hold those funds. As should be apparent from today's action, we will seek to hold a bank to account if it falls short on complying with customer fund protection obligations. Wasendorf stole vast sums of customer money, but his crimes do not excuse U.S. Bank from its own independent responsibilities."

U.S. Bank is the fifth largest bank in the country and has branch offices in Cedar Falls.

Powered by Frankly