US broker PFGBest freezes funds after founder's suicide attempt | Page 3 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

MBT or Pfgbest? 40 replies

how about the broker of Pfgbest? 1 reply

PFGBest - DEMO Server Down for You Too? 7 replies

IkonFX Viking Trader or Pfgbest Viking Trader? 2 replies

New problems with broker, requotes and freezes 0 replies

US broker PFGBest freezes funds after founder's suicide attempt

  • #41
  • Jul 10, 2012 1:52pm Jul 10, 2012 1:52pm
Quoting PoundTrader
The CFTC alleges Mr. Wasendorf misused client money and doctored company accounts for the past two years. never would of happen by my example above
Yes, for 2 years PFG got away with this. It's absurd to even call yourself regulated under such a scenario.

I mean if the CFTC were found legally blind, they might have an excuse worthy enough.

Lets see if Gensler tries to weasel himself out of this one....
  • #42
  • Jul 10, 2012 1:56pm Jul 10, 2012 1:56pm
Quoting pip_seeker
Yes, for 2 years PFG got away with this. It's absurd to even call yourself regulated under such a scenario.

I mean if the CFTC were found legally blind, they might have an excuse worthy enough.

Lets see if Gensler tries to weasel himself out of this one....
i can't understand why can't cftc follow the money, i know it sounds easy but 2yrs and nobody check pfg bank account, they told regulator they had 220 mill in the bank and you mean to tell me regulator's don't check on that, they should learn something MF failure
  • #43
  • Jul 10, 2012 1:56pm Jul 10, 2012 1:56pm
I don't dare even to imagine what would happen if FXCM or OANDA would go bust. A lot of retailers would withdraw their money and this would lead to a consolidation in the business. Small brokers would shut down or sold to bigger ones and we would end up with a few big retail brokers dominating. And we see that size and regulation doesn't mean safety. MF Global wasn't really a small firm...
  • #44
  • Jul 10, 2012 2:01pm Jul 10, 2012 2:01pm
Quoting Forex5050
I don't dare even to imagine what would happen if FXCM or OANDA would go bust. A lot of retailers would withdraw their money and this would lead to a consolidation in the business. Small brokers would shut down or sold to bigger ones and we would end up with a few big retail brokers dominating. And we see that size and regulation doesn't mean safety. MF Global wasn't really a small firm...
sad thing about MF GLOBAL is that corzine never got charge, billion's comes up missing and nobody get charge, the thieves are allowed to get away with it.
  • #45
  • Jul 10, 2012 2:05pm Jul 10, 2012 2:05pm
225 Mil really isn't small either... if you think about all those small accounts less than a couple grand.

I would have thought consolidation would have been other firms merging with one another, not implosions of money - mismanagement.

Really in a nutshell that is what this is... no ability of the firm to manage their finances. Regulation to make sure they do it? Ha.

2 Yrs and a mushroom cloud of "where'd the money go?"

If you call that regulation you need to sit in a padded cell somewhere.

NFA & CFTC : The poster children of how NOT to regulate a market.
  • #46
  • Jul 10, 2012 2:10pm Jul 10, 2012 2:10pm
i like this idea


Former CFTC Chairman Philip McBride Johnson rejected the notion of an insurance program, preferring the creation of a central customer funds repository. Johnson says a repository plan eliminates the risk and be cheaper.

“All customer funds would move solely and directly between the trader and the repository. Each customer would maintain a trading account with the broker and a funds account with the repository,” Johnson notes, adding the broker customer relationship would not change much, “But customers would send their initial and maintenance margins directly to the repository for deposit in their separate accounts there, and all return payments would flow directly from the repository to the customer.”


remeber guys, these action are for future brokers, fx trading will always be at the bottom with regulators
  • #47
  • Jul 10, 2012 3:02pm Jul 10, 2012 3:02pm
Quoting PoundTrader
i think brokers file paper work once a week, so here what im thinking, regulator goes to broker office ask broker for paper work and ask broker how much custormer funds do you have, broker say i got 400 mill total, 200 mill is in the bank the other 200 mill is tied up in margin trading for customers, regulator check out the funds in marging and see 200 mill tied up in margin, then get the bank to fax them a statement and see 200 mill is in the bank, thats week one

now week two

regulator goes back to broker, ask broker for paper work...
Agree PoundTrader good post - this would solve most of the fiduciary risk.
  • #48
  • Jul 10, 2012 3:16pm Jul 10, 2012 3:16pm
i think brokers file paper work once a week, so here what im thinking, regulator goes to broker office ask broker for paper work and ask broker how much custormer funds do you have, broker say i got 400 mill total, 200 mill is in the bank the other 200 mill is tied up in margin trading for customers, regulator check out the funds in marging and see 200 mill tied up in margin, then get the bank to fax them a statement and see 200 mill is in the bank, thats week one

now week two

regulator goes back to broker, ask broker for paper work and ask broker how much customer funds you have, broker say i got 400 mill total, 200 mill in bank and 200 mill in margin trading for customers, regulator check out margin account and see 200 mill tied up in margin, bank fax over broker account statement and see there's only 180 mill and not 200 mill the broker claim, regulator goes back to broker and say WTF is that 20 mill, im freezing everthing, nothing moves untill we find out where that 20mill went.

this way customers has a chance to get 99% of there money back

The CFTC alleges Mr. Wasendorf misused client money and doctored company accounts for the past two years. never would of happen by my example above
  • #49
  • Jul 10, 2012 5:08pm Jul 10, 2012 5:08pm
Quoting DealBook





Investment Banking | Legal/Regulatory July 10, 2012, 1:26 pm24 Comments
Regulators Charge Futures Brokerage Firm With Fraud

By AZAM AHMED4:05 p.m. | Updated
The Commodity Futures Trading Commission on Tuesday charged a futures firm and its chief executive with fraud and making false statements after nearly $200 million in customer funds went missing.
The regulator is seeking a restraining order against the Peregrine Financial Group, also called P.F.G., to prevent the destruction of any information that may be needed in the course of the investigation. The C.F.T.C. is also asking a federal court to appoint a receiver for the firm and freeze its assets. A day earlier, the chairman and chief executive, Russell Wasendorf Sr., tried to commit suicide outside of the firm’s offices in Cedar Falls, Iowa.
The Federal Bureau of Investigation is investigating the matter, according to a spokeswoman for the Omaha office, Sandy Breault. Ms. Breault indicated that the Chicago office of the agency might also get involved.
News of the missing money surfaced Monday, when the firm’s primary regulator, the National Futures Association, determined that an account that was supposed to have $225 million of customer money actually held just $5 million. A further review of records showed that the firm had been falsifying its records as far back as 2010, the regulator said in its complaint. In February 2010, an account that purported to have some $218 million in reality contained just $10 million.
“P.F.G. and Wasendorf have used customer funds for purposes other than those intended by its customers, and consequently, have misappropriated these funds,” the complaint states. “The whereabouts of the funds is currently unknown.”
How the money came to be siphoned off from customer accounts remains a mystery, particularly in the wake of increased scrutiny on the futures industry after the collapse of MF Global.

Related Links

  1. The news release
  2. The complaint


After the fiasco at MF Global, which left customers missing more than $1 billion, regulators vowed to ensure the safety of customer money. Both the N.F.A. and the C.F.T.C. conducted reviews of futures firms to reassure investors. The regulators granted them all clean bills of health.
P.F.G. is a well-known firm in the tight-knit community of futures brokerage firm. Mr. Wasendorf was considered by many to be a pioneer of the industry, having been registered with the C.F.T.C. since 1992. He fully owned P.F.G., and his son, Russell Wasendorf Jr., served as president of the company.
On Monday, the N.F.A., which is an industry self-regulator, moved to halt operations at the firm immediately after discovering the shortfall. In a report filed late Monday, the National Futures Association said that bank statements from U.S. Bank, where customer money was held, could have been fabricated.
This post has been revised to reflect the following correction:
Correction: July 10, 2012
Based on documents provided by the Commodity Futures Trading Commission, an earlier version of this article listed the incorrect headquarters of Peregrine Financial Group. The firm is based in Cedar Falls, Iowa, not Cedar Rapids.

Story Link


What good is a regulator if the firm that is being regulated can just falsify documents? I thought the sole purpose of a regulator is to ensure things are done appropriately.

It's even worse than I thought... the checks and balances is more or less the word of the firms owners.
  • #50
  • Jul 10, 2012 5:22pm Jul 10, 2012 5:22pm
Waiting for the PFG installment on American Greed now. Stanford, Corzine and now PFG would all make the directors cut. For me sadly it will be an expensive tub of popcorn
  • #51
  • Jul 10, 2012 5:57pm Jul 10, 2012 5:57pm
Quoting PoundTrader
The CFTC alleges Mr. Wasendorf misused client money and doctored company accounts for the past two years. never would of happen by my example above
Unless Wasendorf somehow managed to intercept and forge documents from the bank.

http://www.reuters.com/article/2012/...8691F520120710 (Reuters) - Russell Wasendorf Sr., the sole owner and chairman of stricken futures broker Peregrine Financial Group, Inc., intercepted and forged bank documents for more than two years to cover up hundreds of millions of dollars in missing money, a person close to the situation told Reuters.
  • #52
  • Jul 10, 2012 6:11pm Jul 10, 2012 6:11pm
Quoting pber57
Waiting for the PFG installment on American Greed now. Stanford, Corzine and now PFG would all make the directors cut. For me sadly it will be an expensive tub of popcorn
man i love that show
  • #53
  • Jul 10, 2012 6:47pm Jul 10, 2012 6:47pm
Quoting PoundTrader
sad thing about MF GLOBAL is that corzine never got charge, billion's comes up missing and nobody get charge, the thieves are allowed to get away with it.
Agreed 100%. The fact that Corzine is smiling in the Hamptons as I type this is a bloody shame. Every day he roams free represents a giant failure of our justice system and paves the pathway towards further moral hazard in the world of finance..
  • #54
  • Jul 10, 2012 7:25pm Jul 10, 2012 7:25pm
One former employee of the firm said he had grown concerned that Wasendorf did not do more to distance the company from a massive $194 million forex-trading Ponzi scheme run by Trevor Cook in Minnesota, who admitted defrauding more than 700 investors. Cook is serving 25 years in prison.

In February PFGBest, which had acted as Cook's broker, was fined $700,000 by the NFA for failing to notice the scheme. The company was subsequently sued for $48 million by the receiver rounding up the assets from Cook's scheme.
  • #55
  • Jul 10, 2012 7:32pm Jul 10, 2012 7:32pm
http://www.zerohedge.com/news/pfgs-c...gave-all-clear

"If anyone deserves some credit here, it is the NFA:

The scheme apparently began to unravel after the NFA began to press Wasendorf, who was an early advocate of electronic trading, to allow the regulator to confirm balances electronically and directly with the bank, rather than in a hard copy via mail, the person said.

NFA "started getting suspicious. He was resisting this new way of confirming the balance," the source said.

Wasendorf only recently signed the authorization, a decision that would quickly have led regulators to uncover the discrepancy, the person said. PFGBest's total segregated funds requirement was around $400 million, meaning more than half is missing."
  • #56
  • Jul 10, 2012 8:30pm Jul 10, 2012 8:30pm
Quoting mrjinks
PT, it's time for you to take PFG Best out from your Preferred Broker's List

Regards,
MrJinks.
it's crazy, i took all my money out about 3 weeks ago and went with citifx pro 100%
  • #57
  • Jul 10, 2012 8:35pm Jul 10, 2012 8:35pm
Quoting BlackOpz
http://www.zerohedge.com/news/pfgs-c...gave-all-clear

"If anyone deserves some credit here, it is the NFA:

The scheme apparently began to unravel after the NFA began to press Wasendorf, who was an early advocate of electronic trading, to allow the regulator to confirm balances electronically and directly with the bank, rather than in a hard copy via mail, the person said.

NFA "started getting suspicious. He was resisting this new way of confirming the balance," the source...
2nd time in less then a year cftc drop the ball.

if there is an event that should cost Gary Gensler his job as head regulator at the CFTC, it is this. According to a just released Reuters report, the head of MFG(lobal) part 2, PFG, whose story we broke yesterday, Russell Wasendorf Sr. "intercepted and forged bank documents for more than two years to cover up hundreds of millions of dollars in missing money, a person close to the situation." Once Wasendorf realized he was caught, and knew the implications of his actions would be exposed for the whole world to see, he tried to commit suicide, and failed. "Wasendorf, 64, is reported to be in a coma after a suicide attempt Monday morning, according to a complaint filed by the Commodity Futures Trading Commission on Tuesday that accuses Wasendorf and Peregrine of fraud." And while crime happens all the time, what is truly stunning is that as we reported previously, the CFTC gave the firm a clean bill of health in its January inspection of Peregrine Financial Group. That's 6 months ago. The CFTC, as a reminder, was it regulator. The entity whose sole charge is to make sure that firms at least have real, not rehypothecated, cash in their segregated client bank accounts. PFG never did for the past two years. And somehow the CFTC missed this. MF Global was a warning shot, and the CFTC missed it entirely. And not only that but 2 months later ir pronounced PFG clean. For this Gensler has to be fired immediately, and with prejudice.
  • #58
  • Jul 10, 2012 10:27pm Jul 10, 2012 10:27pm
Quoting BlackOpz
"If anyone deserves some credit here, it is the NFA:"
Credit for what?

That it takes a suicide attempt for them to start looking at the books? They are even more clueless than the CFTC and that says alot right there.

NFA Roll call: Please tell us if your broker firms owner shows up for work on time each day to let us know if we need to check your books.

It's beyond absurd. Every last one of them should go to jail. Round em all up Texas Ranger style.
  • #59
  • Jul 10, 2012 10:30pm Jul 10, 2012 10:30pm
Quoting PoundTrader
it's crazy, i took all my money out about 3 weeks ago and went with citifx pro 100%
You might want to play some numbers just for the hell of it... no one I know has that kind of luck.
  • #60
  • Jul 10, 2012 11:04pm Jul 10, 2012 11:04pm
Quoting pip_seeker
You might want to play some numbers just for the hell of it... no one I know has that kind of luck.
0 traders viewing now