Federal Indictment Alleges That Peregrine CEO, Russell Wasendorf Sr., Lied To Regulators Every Month Since Jan 2010

Russell Wasendorf Sr.
“Prosecutors say Wasendorf lied to regulators about the value of customer funds on a monthly basis in reports from January 2010 through May 2012.”

Forbes on August 14, 2012 released the following:

By: Halah Touryalai, Forbes Staff

“Russell Wasendorf Sr., the CEO of the now bankrupt Peregrine Financial Group, has been formally charged by a federal grand jury on 31 counts of misleading regulators.

Wasendorf lied to the U.S. Commodity Futures Trading Commission 31 times about the value of customer funds the firm held. Wasendorf, who’s been held in custody since being arrested in July, faces 155 years in prison and a fine of $7.75 million if convicted on all counts.

According to the indictment Wasendorf submitted false information for his U.S. futures and currency brokerage firm in its 2010 and 2011 financial statements.

Wasendorf “overstated the value of PFG’s customer segregated funds by at least tens of millions of dollars, well knowing and believing the actual value of PFG’s customer segregate funds was at least tens of millions of dollars less than stated in the financial documents,” the indictment says. []

The CEO’s false statements didn’t stop there, according to prosecutors in the U.S. Attorney’s Office for the Northern District of Iowa. Wasendorf lied to regulators about the value of customer funds on a monthly basis in reports from January 2010 through May 2012, prosecutors says.

Last month Wasendorf was arrested after regulators accused PFG of fraud, misusing of client money, violating customer fund segregation laws and making false statements about its finances. Peregrine file for bankruptcy and roughly $215 million in client assets are missing amid the mess.

Wasendorf’s arrest came just days after he attempted to take his own life outside his Iowa-based office building. According to police reports, the CEO attempted suicide and left a note stating that he had been stealing from the firm.

According to reports, the CEO attempted the suicide after a regulator pushed him to allow its auditors to electronically verify customer balances actually exist at its custodian bank–in this case, U.S. Bank.”

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Douglas McNabb – McNabb Associates, P.C.’s
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The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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