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The founder and chief executive of Peregrine Financial Group, the futures broker that collapsed last month with a $215m shortfall in its customer segregated accounts, pleaded not guilty on Friday to lying to US regulators about the company’s finances.
Russell Wasendorf Sr was indicted last week by the US attorney’s office in Cedar Falls, Iowa on 31 counts of misleading federal regulators. If found guilty he could face a maximum sentence of 155 years in prison and a $7.75m fine.
The futures broker chief attempted suicide outside his company’s headquarters last month, setting off a chain of events that included the company’s unexpected filing for bankruptcy and his own arrest.
In a note, he confessed to stealing hundreds of millions of dollars from customers for nearly two decades. Mr Wasendorf said he had acted alone, forging bank statements for nearly 20 years and sending them to regulators such as the Commodity Futures Trading Commission as evidence of how much the brokerage was holding in its customer segregated accounts.
The indictment contended that Mr Wasendorf “submitted and caused to be submitted year-end financial statements for PFG to the US Commodity Futures Trading Commission that overstated the value of PFG’s customer segregated funds … well knowing and believing the actual value of PFG’s customer segregated funds was at least tens of millions of dollars less than stated in the financial statements.”
Mr Wasendorf denied those charges in court and told the presiding judge that he had no questions. A status hearing in the case was set for September 19.
Russell Wasendorf Jr, Mr Wasendorf’s son and the firm’s president, has denied having known about his father’s alleged activities.