Skip to comments.CEO of PFGBest’s Peregrine Financial arrested, charged ($216M customer funds gone)
Posted on 07/13/2012 6:43:23 PM PDT by STARWISE
*snip* FBI agents arrested Russell Wasendorf, Sr., 64, of Cedar Falls on Friday. Federal prosecutors unsealed a criminal complaint charging the CEO of Peregrine Financial Group, Inc., with making false statements to regulators and released documents detailing a wide-ranging fraud scheme that apparently fooled colleagues, customers and regulators for years
Peregrine Financial Group, which marketed itself as PFGBest with offices in Chicago, filed for bankruptcy on Tuesday, the same day federal regulators filed civil fraud charges alleging the firm falsely claimed a bank account contained more than $220 million when it actually had about $6 million. The money in that account belonged to customers and was supposed to be kept separate from Peregrines own money.
Officials from another industry regulator, the Financial Industry Regulatory Authority, were on site at Peregrines Cedar Falls offices to examine the firm Friday. The agency regulates broker-dealers that buy and sell stocks. The losses apparently are centered in the part of Peregrine that sold commodity options and futures.
An affidavit by FBI agent William Langdon, made public with the criminal complaint, says authorities found Wasendorf unresponsive Monday in his vehicle, along with a suicide note and a signed statement in which he detailed his fraud over the past 20 years.
(Excerpt) Read more at suntimes.com ...
What's happening to Corzine for MFGlobal's debacle (now $3Billion gone), and when is someone going to jail for their fiduciary malfeasance and negligence in handling their customers' funds?
A clear failure to make that decisive contribution to the 0bama re-elect campaign.
Maybe he can say hi to Corzine in the joint. Oh, wait...
Ninety Miles An Hour Down a Dead End Street
Posted by Ann Barnhardt - July 12, AD 2012
People are emailing asking what firm I recommend.
The ENTIRE SYSTEM is totally, completely corrupt and therefore NO FIRM IS SAFE. Don’t be stupid. Don’t be obtuse. Snap yourself out of the Stockholm Syndrome that you are clearly stuck in. Get ALL MONEY out of the ENTIRE FINANCIAL SYSTEM, including stocks, bonds, retirement accounts, futures, EVERYTHING.
But what about . . .
What part of EVERYTHING are you not comprehending?
One. More. Time.
If you can’t touch it, if it isn’t physically on your property such that you can stand in front of it with an assault rifle and PHYSICALLY defend it, you don’t own it, and it could be confiscated/stolen from you at any time, if it ever actually existed at all
My plan has been stolen.
Yeah why isn’t Corzine in trouble?
Yeah, well my 201k ain’t where I can physically get it. I do anything with it except draw a measly 3.5% out and I get penalized and back penalized and retroactively penalized. I’m there huckleberry.
He is a Obama Bundler
Corzine just keeps repeating "I don't know where the money went" and "I'm as mystified as everyone else is" and other such insults to the intelligence and somehow he's still walking around, bundling money for Obumbo.
Oh, and he's really smart too. How can one tell? Why, 'cause he's a left-wing liberal, that's how.
“If you can’t pick it up and run with it, you don’t really own it.” Robert Heinlein.
I ask this question in all seriousness. Can any financial institution be trusted anymore?
Or, is it simply a matter of time wherein most to all institutions will be exposed?
Do I slowly start to withdraw my monies and risk keeping it with me?
This is starting to get real sad.
From Chicago...Any connection to anyone in the NeighborHOOD.
“Yeah why isnt Corzine in trouble?”
He made the proper “donation” to Otrauma so he is safe.
Here’s the letter Ann Barnhardt wrote to her customers when she shut down her firm in November. Gird your loins.
BCM Has Ceased Operations (source)
Posted by Ann Barnhardt November 17, AD 2011 10:27 AM MST
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse.
Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion.
Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid even as their clearing firm collapsed and was quickly replaced by another firm within the system.
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Lets not sugar-coat this or make this crime seem complex and abstract by drowning ourselves in six-dollar words and uber-technical jargon.
Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable.
The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFGs leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses.
I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade and there simply isnt that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, clawback is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entitys collapse.
So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the companys bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to clawback those funds. As a hedge broker, this makes my blood run cold.
Generally, as the markets move in favor of a hedge position and equity builds in a clients account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous.
While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity.
The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform.
So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years.
I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.
As for me, I can only echo the words of David:
This is the Lords doing; and it is wonderful in our eyes.
With Best Regards-
~ ~ ~
Her website: http://barnhardt.biz/
~ ~ ~
House of cards ~~ criminals in charge
‘bout damn time the banking sleasebags started being arrested. Mr. Wasendorf should spend a bunch of years behind bars.
Now go get Corzine and Diamond.
Didja patent it?
“Oh, and he’s really smart too. How can one tell?....”
He’s still out of jail?Maybe?
Thank you very much.
Right now, all of my money is in the Space Coast Credit Union.
Usually, they are thought to be more conservative and financially viable.
Any thoughts or info with these?
I’m sure no expert, though you always hear they’re less volatile than banks; however, with all the lawlessness abounding and criminals in charge, who knows what’s a certainty anymore. They can change decades long laws like welfare, they can do and undo anything. Very, very scary times. God help us.
Here’s the site of the National Association of Federal Credit Unions
One In Four Community Banks Risks Failure In Next Three Years
Your article is about a company selling software to help community banks comply with the law.
I know 2 very fine local banks that are among the strongest financially in the nation. None of the “too big to fail” Mega Banks come anywhere close to the asset ratio and performance of those banks.
The “too big to fail” banks operate with much less stringent reserve requirements than the local or regional banks. It is the “illusion” of soundness, but is not backed up with reality.
Like the Federal Government and the illusion of soundness. Whimsical fantasy.
I have read that what Corzine did was “legal” in England and their English branch took the customers money and paid corporate liabilities.
In the US it would have been illegal on it’s face.
Does not change the fact that Corzine is one of Obozo’s top advisors.
The NCUA is like FSLIC was in 1987- so broke, they can’t do anything but put in a conservator and keep running a big broke Credit Union. Texans Credit Union ($1.6 billion) was closed in April, 2011, and a conservator was appointed. It continued to lose money after it was closed, and the feds have sunk at least %60 million in it to keep it afloat.
Thanks gentlemen....will be doing some studying.
That didn't save Nemazee... unless maybe Corzine's a bigger donor.
Ann Barnhardt is a treasure, and I trust her every word.
The ONE good thing about all of this? The big players are being exposed for the crooks they are.
You know the old saying, “Those who can...do”?
We are now seeing “those who can’t....steal.” lol
Years ago I used to work for Alaron, which PFG ultimately bought out a few years ago. Online trading was in it’s infancy and I started to go that direction, for the very reason I saw how things were going and wanted no part of it.
For banks, the FDIC posts numbers that are 3-6 months old under ‘Bank Find’ or ‘Institutional Directory’ - they don’t make it particularly easy to find, but it’s online. Pull up the condition ratios, and see if they are getting better or worse. The higher the ratio the better; while it won’t warn of fraudulent books (like the recent case in Georgia) generally if the capital numbers are in the double digits the bank should be OK. If Core is a high single digit and the others are double digit, it’s probably OK. The Credit Union folks do the same,but their numbers are even harder to find and use.
And remember, even when the FDIC fund went broke, and that happened both a few years ago and in the previous time, no one ever lost a cent of *insured* deposit.
Easier, for banks, is to find someone who will post ‘Texas Ratios’ online. If the Ratio is over 100, the bank is in trouble, if it is over 200, it’s going to need a bailout or it will likely fail.