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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Unprepared's picture

At what degree do Gold and Silver start to vaporize? I need to know if they would be safe when the house is burning?

DoChenRollingBearing's picture

So much sleaze so quickly...  I am going to have to update my "Criminality" article...

Physical PMs and enough CA$H for 3 - 6 months living expenses, depending on how paranoid you are.

Paranoid?  Yes, they ARE out to get us!

mr_T's picture

Running out of fingers to plug the dam..

FEDbuster's picture

Buy long term storage food now.  It's available and relatively cheap.  Silver and gold are nice, but first buy your rice.

LowProfile's picture

Buy more gold than silver.  And remember the ammo and PORN.

Tijuana Donkey Show's picture

analog porn. Just in case they pull the plug on the net.......

tekhneek's picture

50 lbs of rice is like $15 at Costco. 25 lbs of beans is like $14 at Costco. 25 lb bag of salt... $4... four-dollars.

I bought salt, beans, rice, toilet paper, paper towels, vinegar, baking soda (+ water it's toothpaste) water... and a bunch of canned shit in bulk last weekend for like $300... 10oz of silver for 1 year of food ain't bad.

Cheap-ass insurance if y'ask me.

Too bad shortly after I crashed my vehicle into a honey pot, I mean canal... losing all of my preparations.

chunga's picture

It's a good idea to freeze rice, grains, etc. for a while.

Weavil larvae is present in a lot of it and freezing for a while is believed to kill them.

Gross but true.

tony wilson's picture

fact the us government has been buying  japanese rice nice.

freezing  of fukishima mox plutonium covered rice has 0 effect on the million year half cancer inducing  life

tmosley's picture

The stuff that has a long half life isn't what is deadly.  It's the stuff with a short half life that is the problem, and said problem is short lived indeed.

Also, you aren't going to get any plutonium covered rice, and even if you did, plutonium passes right through you and is surprisingly non-toxic since it isn't absorbed.  It is only a real problem when breathed in, as it is very difficult to eliminate that way.

Iodine is probably the most toxic thing you are likely to encounter, and it is long gone by the time it is shipped here, moved to the stores, and frozen for a week in your freezer.

Don't compare your Fukushima problems with Japan's Fukushima problems.  You don't have any, they have them all.

Not Too Important's picture

"...plutonium passes right through you and is surprisingly non-toxic since it isn't absorbed."

Plutonium is the deadliest man-made element ever developed. Tons of it were spread across the globe in the jetstream. A small microparticle in the lung will begin the mutation process.

Not to mention the aerosolized uranium, and all the other radionuclides spread in the global wind. Not to begin mentioning the tons of radioactive water flowing into the Pacific Ocean by the hour. Trillions of lethal doses have been spread around the planet.

Hundreds of thousands of children have died already. Billions of deaths to come.

Personally, I hope you're right. If you're wrong, I hope you go slow.

tmosley's picture

Hundreds of thousands?  Of CHILDREN!?

Christ, I never thought I would see the "think of the children" appeal to emotion brought up here.

A. yes, plutonium is highly dangerous, and deadly if inhaled, as I mentioned.

B. NO, "tons" of it were not spread into the atmosphere, you creep.  I would be very surprised if more than ten grams made it out of the building, much less into the atmosphere.

C. Plutonium is VERY VERY DENSE.  It ain't gonna float on the breeze like a unicorn fart.  It falls out right away, like lead shot.  Same goes for uranium.

The only real danger is from other radioactive decay elements, period.  And of them, the only one that has a chance of reaching the US through the air in significant amounts is iodine, and that stuff decays fast.

Stop being little bitches.  If something is going to happen, it's going to happen in Japan LONG before it happens here.  The whole main island could be contaminated so bad that no-one could live there for a hundred years and there would still be no danger in the US.  Radiation just doesn't work like that.

Also, fuck you in the ass with broken glass for wishing a slow death on someone.  What the fuck is wrong with you?

tmosley's picture

It is surprising but true.  Look it up.  Plutonium is almost non-toxic by mouth.  It takes time to cause toxicity, and the only way you will be exposed for a long time is either by living in Japan or breathing in particles of the stuff.

fuu's picture

Well more rice for you I guess.

Itch's picture

"salt, beans, rice, toilet paper, paper towels, vinegar, baking soda, water and a bunch of canned shit"

Where's this party then?

FeralSerf's picture

You'll have to wait til he's finished fermenting the beans, rice and toilet paper and distilling the result.

FEDbuster's picture

Pack grains in five gal. buckets, lined with mylar bags, put a decent sized piece of dry ice on top of the grains, let it "melt", the carbon dioxide will force oxygen out and kill any would be bugs (no need to freeze the grain), seal bag and put lid on bucket.   Store in a cool, dry place for best shelf life.   Don't forget your oatmeal, it's really a great long term storage food and can be bought in bulk.

fuu's picture

O2 absorbers and gamma lids.

FEDbuster's picture

The carbon dioxide displaces all the O2, so there is no need to spend the money.   Gamma lids are nice after you open the mylar bags.  I pack my stuff in smaller mylar bags (about five bags into each five gal bucket).  I have found the 1 gal. size to be more usable when rotating.

tmosley's picture

They'd use their thumbs, but those are up their asses.

Ms. Erable's picture

Just remember, DCRB: only the paranoid survive.

TraitorsHang's picture

Ag melts at 962C.
Au at 1064C

I know this because all my PMs melted in a fire. They were not recoverable.
Or they sank in a boating accident. Whatever, fuck you.

LeBalance's picture

So very sorry to hear of your loss.  We believe you. - Internal Revenue Service.

TraitorsHang's picture

You can go look for it. It's at the bottom of lake Navajo. You'll know it's mine because it'll be on fire.

Can I book it as a loss?

LeBalance's picture

oh surely, quote whatever basis you like.  50k an ounce?  you got robbed, but we believe you.  :)

(you did say you know Shalom Ben, right?)

(and you are a Grove regular, right?)

Overfed's picture

I've got a couple hundred ounces of silver and a few guns on the bottom of Crater Lake. I need to stop taking my PMs and guns boating with me.

runlevel's picture

i heard that in a matt stone or trey parker  voice or  whatever fuck you.

knukles's picture

Talkin' about stuff lost underwater, didju guys know that John Denver's head was never found in Monterey Bay?

stocktivity's picture

"Sunshine on my shoulders..."

Hulk's picture

Rocky Mountain high, Pacific Ocean Low... Always test switchng to your reserve tank before actually needing to do so in an actual emergency...

Antifaschistische's picture

Gold will boil at 5173 F
Silver will boil at 3924 F

Prior to that, you'll just have to scrape it off your foundation and re-refine it to clean it up a bit.

PaperBear's picture

The house is being burned down because it was the nature of the system.

NotApplicable's picture

Plus there's less evidence, making it double-plus good.

Seize Mars's picture

Bingo. There's your Alaron connection. When they sucked it, the accounts went to PFGBest. Apparently so did Flynn.

Republi-Ken's picture

He just heard that David Stockman said "REPUBLICANS BANKRUPTED AMERICA" and Bruce Babbit said " WE MADE IT ALL UP" in reference to cutting taxes creates jobs... and then he knew the entire Republican Economic Theory was a dismal 30 year failure...

He went to the '2nd Amendment Cabinet', and took out the big palooka, named The Gipper,

and pulled the trigger, sending a horiffic blast up his asshole... his last words were

"We did the same to the American People. I am so sorry. I take personal responsiblity..."

Fred Hayek's picture

You're not only caught up in a red team versus blue team paradigm that doesn't mean jack5hit any more. You can't even identify the team members. Babbit was on the blue team not the red team you hate so much. My god, you don't even hate smart.

Republi-Ken's picture

He just heard that David Stockman said "REPUBLICANS BANKRUPTED AMERICA" and Bruce Babbit said " WE MADE IT ALL UP" in reference to cutting taxes creates jobs... and then he knew the entire Republican Economic Theory was a dismal 30 year failure...

He went to the '2nd Amendment Cabinet', and took out the big palooka, named The Gipper,

and pulled the trigger, sending a horiffic blast up his asshole... his last words were

"We did the same to the American People. I am so sorry. I take personal responsiblity..."

So Sue Me's picture

MFing Global, LIEebor, JP Morgue, now this.  Is Bix Weir right?

CClarity's picture

With no trust left, is it time to reset banking?  It really is all about pyment system and exchange of value for us individuals.  Can't we just make up a new store of value and exchange it through Facebook, LinkedIn, Google, and PayPal?  Authentication systems already in place make that actually safer than credit cards or the TBTF banks.  

Take a page from the many countries doing trade direct now, and not through the US$ anymore.  It isn't as difficult nor as complicated as the banking cabal would like us to believe.

Oh yeah, another infamous GS hook too.  Russell on the charitable board with Hank Paulson, natch.

LeBalance's picture

its really about payment system for individuals?



What this town needs is a BETTER class of criminal!  And I mean to give it to them.


NotApplicable's picture

As Mises noted, the thing about "making up a new store of value" is that all valuations are subjective, based upon past valuations, so it's impossible to create something new with any value as it has no past to guide the present decision.

All natural forms of money had value long before their exchange value was recognized as an intermediate good that could easily be traded for other goods.

The only kind of value that can be created by a "new money" is the value of coercion inherent in legal tender laws, where you accept the paper as payment, or go to jail.