July 12, 2012 — The Securities and Exchange Commission (SEC) has charged Russell Wasendorf, CEO of Peregrine Financial Group Inc., with orchestrating a long-term SEC fraud scheme. Mr. Wasendorf is accused of making false statements to federal regulators as part of a securities fraud scheme that went on for years. When Mr. Wasendorf recently tried to commit suicide, he left a note detailing the fraud, including procedures for faking documents. Mr. Wasendorf allegedly falsified bank statements to hide missing client funds. He was arrested after the unsuccessful suicide attempt.
Mr. Wasendorf claimed to have spent most of the money that he allegedly embezzled on funding a new $18-million corporate headquarters, cushioning the company’s capital, and paying regulatory fees and fines. Mr. Wasendorf also said that, when federal regulators began an investigation of the company’s use of client funds in 1993, Mr. Wasendorf initiated his fraud to get access to other funds. He claims to have been acting alone.
Since Mr. Wasendorf attempted suicide, federal regulators working with the FBI have discovered $215 million that appears to be missing customer funds. Most of the allegedly misappropriated funds were used to meet the increased Regulatory Capital needed to keep the company in business and to pay Peregrine Financial’s business losses. Both the National Futures Association and the Commodity Futures Trading Commission have filed enforcement actions against Mr. Wasendorf and Peregrine Financial Group.
Peregrine Financial Group has filed for bankruptcy.
Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.