CEDAR FALLS, Iowa --- In a stunning turn of events in one day, the future of a Cedar Falls-based international brokerage firm hangs in the balance as regulatory and government officials moved in to investigate possible financial wrongdoing in light of the attempted suicide of company founder and CEO Russ Wasendorf Sr. Monday.
Wasendorf, founder and CEO of PFGBest, the international brokerage firm he wholly owns, reportedly attempted to commit suicide outside the corporate headquarters north of Cedar Falls, company officials confirmed Monday afternoon. Employees found him shortly after 8 a.m. and called 911.
He was taken to Sartori Memorial Hospital, then later was airlifted to University of Iowa Hospitals and Clinics, where he was in critical condition Monday afternoon. An updated condition report was not immediately available.
The National Futures Association, the self-regulating organization of the United States futures industry, initiated an emergency enforcement action Monday afternoon after a review of company bank accounts showed about $220 million was missing and there was a report that Wasendorf falsified records.
News of the development spread quickly over international financial news services. The Wall Street Journal reported a company spokesperson said the firm’s 125 employees across the country could be at risk of losing their jobs. Workers in Cedar Falls were told they could report to work today, but with no guarantees of being paid.
PFGBest had reported on June 29 that it had about $400 million in segregated funds, $225 million of which was supposed to be deposited at U.S. Bank. The NFA had received a report Monday that Wasendorf had falsified bank records. The NFA then checked at U.S. Bank and found only $5 million on deposit.
In the course of the investigation, the NFA also found that reports in February 2010 and March 2011 at US Bank also appeared to be false. On those dates $207 million and $218 million were reported on deposit, respectively. In both cases the NFA found less than $10 million on deposit.
The National Futures Association has placed PFGBest on a “liquidation only” status due to Wasendorf’s condition. 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.
Earlier, on Feb. 8, the National Futures Association announced it had levied a $700,000 fine against Peregrine, based on an NFA complaint and a settlement offer by the company. The complaint alleged that Peregrine and company officials failed to supervise four of its “guaranteed introducing brokers” or GIBs, alleging those brokers “made trade recommendations that maximized commissions without regard for the best interests of their customers and that all four GIBs made deceptive sales solicitations.”
The company and officials “neither admitted nor denied the allegations of the complaint in making their settlement offer,” under which the company also was required to retain “an independent consultant to review Peregrine’s existing procedures for supervising its GIBs and retail customer accounts.”
Wasendorf 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 native of Marion and a 1970 graduate of the University of Northern Iowa, according to online biographies and his own Facebook page.
Wasendorf built a state of the art, environmentally responsible $18 million building set in the woods here when he decided to move his corporate headquarters.
He also established an Italian restaurant, My Verona, in downtown Cedar Falls. More recently he announced he would add a second restaurant at the TechWorks site in Waterloo.
His reach has extended into the community in a number of ways, from the Peregrine Charities Triathlon to a $2 million donation in 2009 to the athletics program at the UNI.
EARLIER STORY
CEDAR FALLS, Iowa --- The National Futures Association had initiated an investigation into PFGBest, including reports of falsifying documents and hundreds of millions of dollars in missing funds Monday, the same day that company CEO Russ Wasendorf Sr. was hospitalized after reportedly attempting to take his own life.
The NFA initiated an emergency enforcement action after a review of its bank accounts showed about $220 million was missing and there was a report that Wasendorf falsified records.
PFGBest had reported on June 29 that it had about $400 million in segregated funds, $225 million of which was supposed to be deposited at US Bank. The NFA had received a report Monday that Wasendorf had falsified bank records. The NFA then checked at US Bank and found only $5 million on deposit.
In the course of the investigation, the NFA also found that reports in February 2010 and March 2011 at US Bank also appeared to be false. On those dates $207 million and $218 million were reported on deposit, respectively. In both cases the NFA found less than $10 million on deposit.
The Wall Street Journal reported a company spokesperson said employees across the country could be at risk of losing their jobs.
PFGBest has been placed on a "liquidation only" status, meaning funds have been placed on hold and most customer transactions have been frozen.
Read More: http://wcfcourier.com/news/local/update-cedar-falls-company-investigated-for-alleged-connection-to-ponzi/article_0108e02a-ca07-11e1-95c8-0019bb2963f4.html#ixzz20E7lhUqU
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