The U.S. House Agriculture Committee will hold a hearing next week to examine the collapse of Peregrine Financial Group Inc., the futures broker with a $200 million shortfall in client funds.
“The futures and swaps markets must function with confidence to allow end-users, farmers and ranchers to effectively manage risk,” Representative Frank D. Lucas, an Oklahoma Republican and chairman of the panel, said yesterday in a statement announcing the July 25 hearing.
Peregrine is under investigation after Chairman and Chief Executive Officer Russell Wasendorf Sr. unsuccessfully attempted suicide. The National Futures Association said the chairman may have falsified bank records after only $5 million was found in an account that was reported to have $225 million on or about June 29. Wasendorf said in a signed statement linked to his suicide attempt that he committed fraud for two decades at his Cedar Falls, Iowa-based company, according to a criminal complaint.
The Commodity Futures Trading Commission sued Peregrine over the shortfall on July 10, less than a year after being scolded for poor oversight following the collapse of MF Global Holdings Ltd. (MFGLQ:US), which left an estimated $1.6 billion gap in customer funds.
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