PFGBest Reviews & Ratings
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PFGBest – pfgbest.com reviews and ratings.
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CHICAGO, July 11 (Reuters) – The largest U.S. grain trade group was stunned by the latest scandal to hit the futures industry when Iowa-based brokerage PFGBest collapsed after regulators accused the firm of misappropriating customer funds.
Peregrine Financial Group, PFGBest’s regulated unit, filed for bankruptcy on Tuesday in Chicago after regulators accused it of misappropriating customer funds for more than two years.
The Commodity Futures Trading Commission (CFTC), which along with industry regulators had given a clean bill of health to dozens of brokers following spot checks in January, alleged that Peregrine Financial Group and its owner, Russell Wasendorf Sr, had defrauded customers and lied to regulators in order to hide a shortfall that now exceeds $200 million.
PFGBest was not a clearing member of a futures exchange like the CME Group, so oversight for its activity fell to the CFTC and the National Futures Association, a self-regulator for the trillion dollar derivatives markets.
Russell Wasendorf Sr, PFGBest’s founder and chairman, intercepted confidential regulatory documents that were mailed by the NFA to what it believed was U.S. Bank, a person close to the situation told Reuters on Tuesday. Wasendorf forged signatures and fabricated bank balances on the documents and simply mailed them back to Chicago-based NFA, the person said. The scheme apparently began to unravel as the NFA shifted to electronic confirmations.
The CFTC complaint, which relies on many of the details released on Monday by the NFA, the broker’s main regulator, said the bank account that PFG reported was holding $225 million in 1,845 customer accounts actually contained less than $10 million.
PFGBest’s clearing firm, Jefferies & Co, said on Tuesday it had liquidated accounts of PFGBest starting on Monday when the firm missed a margin call, or a request for more funds to hold trading positions.