Reuters: Bankruptcy News: UPDATE 1-PFGBest CEO arrested after Iowa brokerage fails

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UPDATE 1-PFGBest CEO arrested after Iowa brokerage fails Jul 13th 2012, 18:10 Fri Jul 13, 2012 2:10pm EDT By Tom Polansek CHICAGO, July 13 (Reuters) - Russell Wasendorf Sr., the founder and CEO of failed futures brokerage PFGBest, was arrested on Friday, five days after his suicide attempt brought to light allegations of a massive fraud, authorities said. FBI agents arrested Wasendorf, 64, for making false statements to regulators, according to the agency. A federal complaint alleges that, from 2010 through July of 2012, Wasendorf made false statements to the U.S. Commodity Futures Trading Commission regarding the value of customer segregated funds held by Wasendorf's Iowa-based company, legally known as Peregrine Financial Group, Inc. He is set to appear in federal court in Cedar Rapids, Iowa, later today. Peregrine filed for bankruptcy protection on Tuesday, and the CFTC and the National Futures Association have accused the firm and Wasendorf of misappropriating more than $200 million in customer funds. The alleged fraud came to light after Wasendorf tried to kill himself on Monday by funneling tailpipe exhaust into his car in the parking lot of Peregrine's headquarters in Cedar Falls, Iowa, authorities said. A note nearby indicated "possible discrepancies" in PFGBest's financials, they said. A spokeswoman for the company could not be reached for comment. The name of Wasendorf's lawyer was not known. Link this Share this Digg this Email Reprints

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