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Futures Brokerage PFG Best Freezes Accounts Following Discovery Of Accounting Irregularity

Tyler Durden's picture




 

Update 3: Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon.

Update 2: PFGBest had $400MM in customer segregated funds at the end of April. Is JPMorgan about to "discover" another $400 million in Q2 "profits"?

Update: PFGBest Plans 'Several Hundred' Layoffs, Spokeswoman Tells Dow Jones - Dow Jones. Sounds like a good idea in the facec of liquidation

Just out from futures broker PFG Best to clients, where the owner's suicide attempt apparently has led to a whole new MF Global spin off.

Monday, July 9, 2012

 

Due to a recent emergency involving Russell R. Wasendorf, Sr., a suicide attempt, some accounting irregularities are being investigated regarding company accounts.  PFGBEST is wholly owned by Mr. Wasendorf.  Therefore, the NFA and other officials have put all funds on hold, and PFGBEST is in liquidation-only status with our clearing FCM.  What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds.  We will update you as any new procedures are stipulated and with any further information as it becomes available.

... And just as the public trust was storming back into the capital markets.

From Reuters:

Small U.S. futures brokerage PFGBest told customers on Monday that its funds had been put "on hold" as it investigates accounting irregularities following an apparent suicide attempt by the firm's owner.

 

The Cedar Falls, Iowa-based broker, which had about $400 million in customer segregated funds at the end of April, said it was in "liquidation-only" status with its futures commission merchant (FCM), meaning that "no customers are able to trade except to liquidate accounts," according to the notice.

 

It said the National Futures Association (NFA) and other officials had put all its funds on hold.

 

PFGBest officials were not immediately available to comment. One PFGBest broker verified the letter. A second source familiar with the company said owner Russell R. Wasendorf, Sr., had attempted to commit suicide at the firm's Iowa compound.

From WCF Courier:

Prominent Cedar Falls businessman hospitalized after suicide attempt

 

Russ Wasendorf Sr., the founder and CEO of PFGBest, reportedly attempted to commit suicide this morning outside the corporate headquarters in rural Cedar Falls, company officials confirmed Monday afternoon.

 

Wasendorf was taken to Sartori Memorial Hospital this morning, then later was airlifted to University of Iowa Hospitals and Clinics, where he was in critical condition.

 

Emergency crews were called to the headquarters shortly after 8 a.m. after employees found a man in a car near the headquarters building, located near the Beaver Hills Country Club.

 

The National Futures Association, the self-regulating organization of the United States futures industry, has placed PFGBest on a “liquidation only” status due to Wasendorf’s condition. The company is wholly owned by Wasendorf.

 

The company stated that all funds have been put on hold, meaning customers will only be able to sell off their interests, until future notice.

 

According to company officials, accounting irregularities are being investigated.

 

Wasendorf, the founder of PFGBest, an international brokerage firm, moved the corporate offices of the company from Chicago to rural Cedar Falls in 2009. He had started the company in Chicago in 1990.

 

Wasendorf is a Cedar Falls native who started his business in his hometown.

Meet Russell R. Wasendorf, Sr.

PFGBEST's Leadership

Russell R. Wasendorf, Sr.
Chairman and Chief Executive Officer of PFGBEST

PFGBEST, the brand that evolved from Peregrine Financial Group, Inc., was incorporated in 1990 and has grown to become one of the largest U.S. non-clearing futures brokerage firms.

Russell R. Wasendorf, Sr.PFGBEST has a presence in the world’s major financial centers, plus a network of more than 700 branches, introducing brokers, foreign introducing brokers and Commodity Trading Advisors (CTAs) serving customers in 80 countries. The company is an industry leader in technology innovations to benefit online traders and investors. It has multiple proprietary online trading platforms that have been spun off of the original BESTDirect Online Trading system, which was one of the very first to deliver customer orders directly into the Globex trading engine of the Chicago Mercantile Exchange, in 1998.

Throughout the 1980s, and 1990s, Russell R. Wasendorf, Sr. invested in technological capabilities to create the BESTDirect Online Trading platform, well before other brokerage firms were engaged in this science.

Today, the BESTDirect Online Trading platform continues to be known for its efficiency and reliability, making futures and forex markets more transparent and more easily accessible for all participants. PFGBEST has grown to be a liquidity provider that is completely unbiased and diversified to accommodate trading strategies across a variety of asset classes, including futures, forex, options, securities and precious metals.

PFGBEST has a leading position in online futures, forex and options; retail brokerage; forex services for individual and institutional clients; managed accounts; demand-inspired new technologies and investor education.

Russell also founded SFO – Stocks, Futures and Options, the Official Advocate for Personal Investors – in 2001. The magazine became one of the most widely-distributed monthly publication specializing in these investments, and today it is completely digital.

He is a noted writer and educator, having written or co-written six books about futures and trading. These include: Commodity Trading: The Essential Primer; All About Futures From The Inside Out; All About Commodities From The Inside Out; All About Options From The Inside Out; All About Managed Futures From The Inside Out; and The Complete Guide To Single Stock Futures.

In 2007, Russell founded W&A Publishing, a firm that has brought numerous authors to market and developed a reputation as “the trader’s tutor”. In 2009, he purchased the assets of another well-regarded investment publisher, Trader’s Press, and moved the business to Cedar Falls, Iowa. The two were merged under the Wasendorf & Associates, Inc. brand in 2010.

Russell is widely recognized as an expert and industry voice in many venues, advocating on behalf of efficiencies for individual investors. He serves on the FCM Advisory Committee of the National Futures Association (NFA).

He is one of the original partners in a real estate development company, Avrig 35, headquartered in Bucharest, Romania. Avrig 35 has built some of the most significant commercial buildings in East Europe during the past decade.

He sits on the Board of the Peregrine Fund along with notables including Patricia Disney, Julie Wrigley, Lee Bass, Henry Paulson, Jr. and Paxton Offield. The Peregrine Fund is a non-political, science-based organization in Boise, Idaho, which works worldwide to conserve wild populations of birds of prey. He also sits on the President Committee of both the University of Iowa and the University of Northern Iowa.

Russell began his career as director of public affairs for the American Soybean Association and is a photographer and cinematographer. After that, he worked with Commodities Magazine from 1976 to 1980 and was Director of the Commodities Educational Institute, an affiliated entity. In 1980, he started Wasendorf & Associates, and he founded the Center for Futures Education. Wasendorf & Associates created an Introducing Brokerage arm – Wasendorf & Son Company – in 1986. Peregrine Financial Group, Inc. was born in 1990 to better serve trading customers.

Russell’s philanthropic endeavors are channeled through Peregrine Charities, a private family foundation that he founded in 2004, with a charitable focus on research and cures for rare childhood diseases and help for the families facing these illnesses.

He received two honors in 2010: the Patriotic Employer Award, for support of the U.S. National Guard and Reserve and employees who are serving or have served in the military; and, the Treating Capital Award from the Cedar Valley Alliance and the Cedar Falls Chamber of commerce for providing regional opportunities in technology employment and commitment to green practices and sustainability efforts.

* * *

And while Senior obviously had some problems, as confirmed by his Finra record, his son appears to have had some close encounters with the regulators as well.

 

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Mon, 07/09/2012 - 16:55 | 2599918 Seize Mars
Seize Mars's picture

Whither thou goest, Alaron Trading?

Mon, 07/09/2012 - 16:58 | 2599930 Unprepared
Unprepared's picture

I hope Gerald Celente does not have an account with them, or you know what, screw him, I don't give a shit anymore.

Mon, 07/09/2012 - 17:21 | 2599989 hedgeless_horseman
hedgeless_horseman's picture

 

 

Until further notice, PFGBEST is not authorized to release any funds.

Don't panic! 

I am certain JPM got their money before the news broke.  Jamie Dimon will be fine.  His career is safe. 

Now, get back to the salt mines!

Mon, 07/09/2012 - 17:21 | 2600013 tmosley
tmosley's picture

Do we have any idea how much money is tied up in PFG right now?

Mon, 07/09/2012 - 17:23 | 2600018 Rahm
Rahm's picture

Fuckin JPM strikes again

Mon, 07/09/2012 - 17:35 | 2600071 knukles
knukles's picture

So happy everything's still OK today.

Mon, 07/09/2012 - 17:42 | 2600092 iDealMeat
iDealMeat's picture

I knew there was a Squid connection in here somewhere.

 

He sits on the Board of the Peregrine Fund along with notables including Patricia Disney, Julie Wrigley, Lee Bass, Henry Paulson, Jr. and Paxton Offield.

 

 

Mon, 07/09/2012 - 18:26 | 2600236 CIABS
CIABS's picture

I just looked on the New York Times website and found no reference to this story.

Mon, 07/09/2012 - 18:38 | 2600265 Temporalist
Temporalist's picture

Stan now more than ever you need to understand the importance of saving money

And it's gone...

http://www.youtube.com/watch?v=4TlPo0yCSa4

Mon, 07/09/2012 - 18:41 | 2600281 Aziz
Aziz's picture

More proof the banks learned the necessary lessons since 2008.

Mon, 07/09/2012 - 19:01 | 2600322 The Watchman
The Watchman's picture

Just when "vaporized" was starting to get old.....

Mon, 07/09/2012 - 19:18 | 2600354 sunaJ
sunaJ's picture

I'm a little fuzzy on the chicken/egg details of this story.  Is it because of the suicide attempt that enforcement actions were taken on PFG?  If so, is that the level of opacity that governs intervention, where it is only when someone attempts suicide or people's money vaporizes that it is finally decided that enforcement action must be taken on a firm? 

Mon, 07/09/2012 - 18:38 | 2600268 NumberNone
NumberNone's picture

Just in case anyone is interested, you can pick up a copy of Russell R. Wasendorf's book "All About Futures: From the Inside Out" for .01.   Somehow a very ironic title.

Maybe it wasn't a suicide but an disgruntled buyer of the book that felt he/she overpaid? 

http://www.barnesandnoble.com/w/all-about-futures-thomas-a-mccafferty/1000066700?ean=9781557382962

 

Mon, 07/09/2012 - 21:30 | 2600759 LostAtSea
LostAtSea's picture

or, it was the beneficiary of that $220M....killed him because he was going to go public with the details..?

 

Mon, 07/09/2012 - 18:43 | 2600272 NumberNone
NumberNone's picture

Also, looks like Wasendorf was one step ahead of the FCM and put himself into liquidation only status. 

Mon, 07/09/2012 - 18:54 | 2600306 Ms. Erable
Ms. Erable's picture

And he came soooo close to becoming a Good Banker this morning.

Mon, 07/09/2012 - 18:39 | 2600275 HoofHearted
HoofHearted's picture

Why couldn't Corzine have at least had the decency to attempt to commit suicide? This guy actually has some integrity. Corzine- not so much...

Mon, 07/09/2012 - 19:02 | 2600324 Whoa Dammit
Whoa Dammit's picture

It's more likely he's a guy who knows what happens when someone is run over by a combine harvester, and tried to take a better way out.

Mon, 07/09/2012 - 19:42 | 2600456 francis_sawyer
francis_sawyer's picture

Combine Harvester ~ LOL...

~~~

Yeah dude, here's your BALE OUT, I have it right here...

Mon, 07/09/2012 - 21:25 | 2600750 WillyGroper
WillyGroper's picture

now that's damn funny!

Mon, 07/09/2012 - 19:30 | 2600410 killedbyshortvol
killedbyshortvol's picture

Try the National Futures Association (SRO) website for case docs (it looks as though depositors are in trouble):

http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=3356

http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=3357

 

 

Mon, 07/09/2012 - 20:59 | 2600687 fuu
fuu's picture

"Further, NFA learned that, in contrast to purported bank confirmations submitted to NFA that sought to confirm U.S. Bank account balances as of February 2010 and March 2011, that reported balances of approximately $207 million and $218 million, respectively, PFG's actual balances at U.S. Bank at those times was less than $10 million for each one of the months."

 

29 months...

Mon, 07/09/2012 - 19:24 | 2600370 King_of_simpletons
King_of_simpletons's picture

I'm noticing a pattern among these crooks. They seem to be attempting to commit suicide or atleast pretending to kill oneself after looting money. Here is another one: http://www.dailymail.co.uk/news/article-2171100/Aubrey-Lee-Price-Did-disgraced-money-manager-kill--secretly-run-swindled-millions.html?ito=feeds-newsxml

 

Advise to bankster looters. Buy a better rope, real bullets and potent poison. Don't chicken out. Go for it till the end.

Tue, 07/10/2012 - 00:42 | 2601163 Antifaschistische
Antifaschistische's picture

Wrong King...they're attempting suicide AFTER looting and AFTER getting caught.   Most of the looters and counterfeiters are still jet setting around the globe in 20-50 million dollar yachts.

Mon, 07/09/2012 - 17:36 | 2600074 LeBalance
LeBalance's picture

NONE!

/hahahahahahahahahahahahaha/

Mon, 07/09/2012 - 17:57 | 2600127 AGuy
AGuy's picture

As Gomer Pyle said often:

"Surprise, Surprise, Surprise!"

Or Perhaps you would perfer the Jim Varney version.

"Hey Vern, You remember that Futures Account I held for you..."

 

Mon, 07/09/2012 - 17:44 | 2600097 Ninja Report
Ninja Report's picture

[PFGBEST] has approximately $500 million in customer assets in segregated futures and forex accounts.

http://www.pfgbest.com/about/index.asp

Mon, 07/09/2012 - 17:50 | 2600112 hedgeless_horseman
hedgeless_horseman's picture

 

 

...segregated...

lol

Mon, 07/09/2012 - 19:27 | 2600395 Missiondweller
Missiondweller's picture

Yeah, we'll see about that.

Mon, 07/09/2012 - 17:59 | 2600138 tmosley
tmosley's picture

Thanks.

Mon, 07/09/2012 - 18:01 | 2600148 tekhneek
tekhneek's picture

"Segregated" ... there's that word again. Pretty sure we need a new ZH definition of "Segregated" funds.

Any takers?

Mon, 07/09/2012 - 18:08 | 2600185 fuu
fuu's picture

Vaporized?

Mon, 07/09/2012 - 18:10 | 2600193 cougar_w
cougar_w's picture

Winner! That was easy.

Mon, 07/09/2012 - 20:10 | 2600555 fuu
fuu's picture

Did I win? <pleaseletitbeapony>

Mon, 07/09/2012 - 23:01 | 2600991 tekhneek
tekhneek's picture

You win.

5 baby unicorns and a pot of gold for you sir.

Mon, 07/09/2012 - 18:47 | 2600290 knukles
knukles's picture

Segregated (noun.  English, etymology, from Latin sacred as in everybody wants to get their fucking hands on it)
1.)  As in put aside separate from the others so is easily identifiable as to be property of a Muppet and therefore risks no penalty from theft thereof.
2.) Eminently steal-able.
3.) Bait Account
4.) Fictional safety factor oft associated with fraudulent business practices
5.) As in asking to get fucked over
6.) Cronholed, or Corzined as in "You have been Cornholed."
7.) To never be seen again as in "Your money has been segregated from your possession."  "Out of reach, including and especially you."
8.) Toxic
9.) Unregulated
10) promised by thieves
synonym:  Allocated, safe, don't worry, be happy, gotcha covered, collateralized, marked to market, insured, third party, no conflict of interest.

Mon, 07/09/2012 - 18:50 | 2600298 BandGap
BandGap's picture

Segregated - to do as we please until caught.

Mon, 07/09/2012 - 18:56 | 2600309 Itch
Itch's picture

Liberated.

Mon, 07/09/2012 - 19:24 | 2600383 Bill D. Cat
Bill D. Cat's picture

Any good definition would only end up in the Urban Dictionary .

Mon, 07/09/2012 - 20:57 | 2600678 Benjamin Glutton
Benjamin Glutton's picture

Segnegated....

Mon, 07/09/2012 - 18:33 | 2600258 stocktivity
stocktivity's picture

...but this is off their website -

"PFGBEST has a slogan: “The BEST thing about our technology is our people.” The customer service and customer relations team makes every effort to serve you with promptness and courtesy to earn their reputation as experts in customer care in the futures trading industry."

Mon, 07/09/2012 - 17:18 | 2599995 BC6
BC6's picture

Anyone else going to take delivery on their SpongeBob silver coin set from PFGBEST?

http://www.spongebobcoins.com/

Mon, 07/09/2012 - 17:39 | 2600081 knukles
knukles's picture

Holy Bejezuz...

Can always tell a serious business by it's product line.

Mon, 07/09/2012 - 17:39 | 2600082 ITrustMyGut
ITrustMyGut's picture

HELLZ YA!!!

pwned!

Mon, 07/09/2012 - 18:39 | 2600274 Son of Loki
Son of Loki's picture

The SEC will get right on this...I'm not worried.......

Mon, 07/09/2012 - 19:36 | 2600435 fuu
fuu's picture

Nice find. $260 for 4 troy oz and a pirate chest.

Mon, 07/09/2012 - 17:19 | 2600005 Gringo Viejo
Gringo Viejo's picture

"The 2nd time you get kicked by a mule, you don't learn anything."

 

Mon, 07/09/2012 - 19:17 | 2600350 GoinFawr
GoinFawr's picture

On mules we find two legs behind

And two we find before;

We stand behind before we find

What the two behind be for.

When we're behind the two behind,

We find what these be for;

So stand before the two behind,

And behind the two before.

Tue, 07/10/2012 - 01:22 | 2601202 Oh regional Indian
Oh regional Indian's picture

*Clap*

Instaclassic GoinF!

ori

Mon, 07/09/2012 - 16:59 | 2599936 Silver Bug
Silver Bug's picture

The paper pushers are going to eventually burn the house down. Hold your gold and silver tight.

 

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