(AP) 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.
We are now learning the hard way what assets and accounts SIPC will not cover. The futures markets are huge.
I wonder whether the PFGBest and MFGlobal frauds will affect food prices, since farmers are big participants in the futures markets.
This situation seems closer to a Madoff fraud than a Corzine fraud. $225 million supposed to be in the bank when futures accountants verified it through manual verification forms (which the PFGBest boss had diverted to his own personal P.O. box so he'd be the only one signing off on them), but only $5 million in the accounts when futures accountants move to electronic verification? And the media seems to be pretty quiet about this one, even though it comes with the potential for some exciting arcs and plot lines (boss attempts suicide in the company parking lot, employees save him...) Maybe $220 million is not big enough to worry about as far as frauds go. Has the media lost their interest in small financial frauds?
Last edited by smurff on Thu Jul 12, 2012 12:59 pm, edited 1 time in total.
Pointedstick wrote:
Diversification across brokerages FTW.
I've got accounts at Vanguard, Fidelity, Sharebuilder, and Treasury Direct right now each with a PP asset. Bring on the diversification!
Ding ding ding! If I had the power to give you a start I'd give you a star for the day. Sharebuilder is easy to find promo codes so you really don't pay anything for purchasing gold etfs every once and a while and I have bullion coins as well. Fidelity has a nice Treasury feature (but I got an IRA with Vanguard and put treasuries in there as well). Vanguard also has lower expense ratios than Fidelity and Treasury Direct has got some pretty sweet bonds for the accumulating type with long-time horizons (both I and EE).
let me guess
Treas. Direct obvs for Cash (I Bonds)
Vanguard for Stock
Fidelity for 30 yr UST-Bond
Sharebuilder for Gold
"Peregrine Financial’s Missing Assets Include 304 SpongeBob SquarePants Coins"
Sometimes the headlines describing details around the frauds are too funny.
Hundreds of SpongeBob SquarePants silver coins thought to be in the possession of Peregrine Financial Group, the bankrupt commodities futures trading firm, have gone missing.
The disclosure that 304 silver coins sporting the image of TV cartoon character SpongeBob SquarePants could not be located was made in a court filing on Thursday by Peregrine Financial’s bankruptcy trustee. Thirty-nine ounces of gold were also missing...
Apparently PFGBest owned a PM firm, PFG Precious Metals, that sold gold and platinum coins.
