Swamped Futures Regulators to Oversee Swaps Under Dodd-Frank
Jeff Horwitz – American Banker
The failure of Peregrine Financial Group highlighted weaknesses in regulatory oversight of the commodities market. Instead of getting stronger, however, the current system is about to be stretched a lot thinner.
There’s nothing wrong with that structure, says John Lothian, who publishes a stable of newsletters on futures markets. But transposing it to a massive new market “has left some major holes in how these regulatory bodies conduct their primary missions,” he says. “We’ve got the regulation we’ve ordered, which is cheap.”
Insight: PFGBest regulator known for inexperienced auditors
Sarah N. Lynch and Ann Saphir – Reuters
The watchdog that missed for nearly two decades the blatant fraud at failed brokerage PFGBest has frequently sent out fresh college graduates to look over the books of complex financial firms, people familiar with its operations say.
**** When the NFA auditors come to the office, it is often mistaken for bring your kids to work day.
The Curious Investor: Fraud puts futures markets to the test
David Roeder – Chicago Sun-Times
I’ll let you in on a secret about futures trading in Chicago, something I’ve picked up in 20 years of following this homegrown, colorful and occasionally brilliant industry. It has a public persona that doesn’t match reality. Think of the sweaty traders, loud, brash and seemingly ready to bust somebody’s nose in the pits. They’re still around, despite a shift to electronic trading, and remain a colorful emblem of Chicago ingenuity. So it might surprise you that there’s another truth about the futures business: It’s full of wusses on the public dole.
**** David Roeder with a punch right in the nose of the futures industry.
For CME, It’s Time To Lead
Jeff Carter – Town Hall Finance
PFG Best was the straw that broke the camel’s back in the futures industry. Certain fraud only because Wasendorf was man enough to admit it. Corzine with MF Global hasn’t admitted it. He came from the banking and political culture where you never admit you are wrong. If you repeat the lie long enough it might turn into fact.
**** It is time for bold leadership. I will leave it at that.
Wasendorf Fraud at Peregrine Lasted 20 Years, Prosecutors Say
By Andrew Harris and Linda Sandler – Bloomberg
Peregrine Financial Group Inc. Chief Executive Officer Russell Wasendorf said in a signed statement linked to his suicide attempt that he perpetrated a fraud at his Cedar Rapids, Iowa-based company that stretched back two decades, according to a federal complaint.
Peregrine CEO Charged With Lying to Regulators
By Jacob Bunge – Dow Jones
The chief executive of collapsed brokerage firm Peregrine Financial Group Inc. was arrested Friday and charged with lying to regulators, according to the U.S. Attorney’s Office.
Peregrine CEO’s Dramatic Confession
By Jacob Bunge, Scott Patterson and Julie Steinberg
The head of collapsed brokerage firm Peregrine Financial Group Inc. admitted to embezzling more than $100 million from clients over nearly 20 years by personally doctoring bank statements and duping auditors with the help of a post-office drop box, federal prosecutors said Friday.
Law Firms Ready Class-Action Suit for Peregrine Clients
Jacob Bunge – Dow Jones
Two law firms that represented customers caught up in the collapse of MF Global Holdings Ltd. (MFGLQ) have linked up to prepare a class-action lawsuit on behalf of clients of Peregrine Financial Group Inc.
Peregrine Financial Group: Another Futures Firm Implodes (And What Regulators Should Do)
Nine months after the collapse of MF Global, another futures trading firm has imploded. Peregrine Financial Group (PFG), also known as PFGBest, filed for Chapter 7 in federal bankruptcy court on Tuesday. The filing occurred a day after the firm’s founder, Russell Wasendorf Sr., attempted suicide. Wasendorf is accused of misappropriating customer funds, making false statements and fraud.
Futures Clients Ask: ‘Where’s My Money?’
TATYANA SHUMSKY AND JERRY A. DICOLO – WSJ
Hours after news flashed last week that futures brokerage Peregrine Financial Group Inc. was imploding, Greg Sabatello’s phone was jammed with customers questioning the safety of their money in his $70 million electronic-brokerage firm, TransAct Futures in Chicago. Mr. Sabatello, president of TransAct, told clients their money was safe, but some didn’t take his word for it. Instead, they asked for some of their money back, to make sure it was there, he said.