Brokerage PFGBest on the rocks, owner attempted suicide: Sources

The National Futures Association said today in a news release that it took “an emergency enforcement action” against Peregrine Financial Group Inc., also known as PFGBest, and that the firm might not have sufficient funds to meet its obligations to customers. The association, which is funded by the industry and has responsibility for overseeing PFG, said in the release that the firm was prohibited from accepting any additional customer funds; trading in customer accounts, other than to liquidate the accounts; or disbursing from the accounts without NFA approval. PFGBest, a small U.S. futures brokerage, told customers on Monday that its funds had been put "on hold" as it investigates accounting irregularities following an apparent suicide attempt by the firm's owner. While Peregrine's parent is based in Cedar Falls, Iowa, it has subsidiaries and employees based in Chicago and provides its futures commission merchant and commodity trading adviser services to customers in Chicago. NFA has taken the action “to protect customers because PFG has failed to demonstrate that it meets capital requirements and segregated funds requirements,” the NFA said in the release. “NFA also has reason to believe that PFG does not have sufficient assets to meet its obligations to its customers.” The situation conjured up recent memories of the demise of futures commission merchant and broker MF Global Holdings Inc., which revealed that as much as $1.6 billion in commodity customer funds were missing after it collapsed last October. The broker, which had about $400 million in customer segregated funds at the end of April, said it was in "liquidation-only" status with its futures commission merchant, meaning that "no customers are able to trade, except to liquidate accounts," according to the notice. PFG said the association and other officials had put all its funds on hold. PFGBest officials were not immediately available to comment. One PFGBest broker verified the letter. A second source familiar with the company said owner Russell R. Wasendorf, Sr., had attempted to commit suicide at the firm's Iowa compound. His son, Russell Wasendorf, Jr., is the company's president and chief operating officer. Both are based in Cedar Falls. --Crains Chicago Business-- (With reporting by Reuters)