Chief of troubled Cedar Falls brokerage left suicide note

PFG founder, chairman attempted suicide, company says

Associated Press
Published: July 10 2012 | 9:55 am - Updated: 31 March 2014 | 9:32 pm in

A regulatory group ordered accounts frozen at Iowa-based brokerage Peregrine Financial Group late Monday, saying it hasn't been able to account for $220 million in customer funds, following what the company said was a suicide attempt by its founder and chairman.

The National Futures Association said it received information that PFG may have falsified bank records, and that the company only had about $5 million of $225 million it had claimed to have in a deposit account. The association, an industry group that serves as a self-regulatory role, said PFG could not demonstrate that it meets capital requirements and rules requiring it to segregate customer funds.

Company founder and chairman Russell Wasendorf Sr. was found in his car at company headquarters, with a tube connecting the vehicle's tailpipe to the interior, authorities said Tuesday.

Employees of Peregrine Financial Group discovered Wasendorf in the vehicle Monday, along with a suicide note that prompted investigators to notify the FBI, Black Hawk County Sheriff Tony Thompson said.

The sheriff declined to discuss the contents of the note, except to say it was "a form of documentation that caused alarm, at least concern for us to get federal authorities involved."

Emergency crews were not sure how long Wasendorf had been in the car, Thompson said.

Wasendorf's condition was unclear. The local hospital declined to say whether he had been treated there.

A PGF spokeswoman didn't return phone messages and emails from The Associated Press, and several messages left at PFG's offices in Cedar Falls, Iowa, and Chicago were not returned.

In a statement to its clients, the company said Wasendorf attempted suicide earlier Monday, though it provided no information on his condition. The company said the attempt prompted investigation of "some accounting irregularities."

Lauren Nelson, spokeswoman for PFG customer Attain Capital, said her company has a "substantial amount" of business with PFG and is still assessing how badly its accounts were affected. Nelson provided a copy of the PFG client statement to the AP.

The futures association's action bars PFG from most trading, except as needed to liquidate customer accounts. The company also can't accept any new customer money except to cover existing accounts.

It was unclear late Monday if the government would get involved. Pete Deegan, spokesman for the U.S. Attorney for the Northern District of Iowa, said he could neither confirm nor deny any investigations handled by the office.

But the move is likely to increase scrutiny on an industry still smarting from the implosion of futures firm MF Global last October.

MF Global, a brokerage headed by former New Jersey Gov. Jon Corzine, filed for bankruptcy protection, crippled by disastrous bets on European debt, less than two years after Corzine became CEO.

A bankruptcy trustee is still trying to recover $1.6 billion in money missing from MF Global's client accounts. That case prompted calls for increased regulation of the futures industry.

A message left at a phone listing in Cedar Falls for Wasendorf wasn't returned Monday. The local sheriff's office said it had no information on the suicide attempt, and the local hospital said it didn't have a patient listed under his name.

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