Peregrine Financial Group Inc.’s handling of its employees’ 401(k) plan is being reviewed by the U.S. Labor Department, the collapsed commodity firm’s bankruptcy trustee told a U.S. Senate Panel.
Trustee Ira Bodenstein disclosed the department’s action in written testimony for a hearing today by the Senate Agriculture Committee. In the statement, Bodenstein summarized his role and progress in the bankruptcy since being appointed July 11 to liquidate the firm and pay its creditors.
“I am also working diligently to address employee issues, including those related to an investigation that has been initiated by the Department of Labor into Peregrine’s employee 401(k) plan,” Bodenstein said without elaboration.
Peregrine filed for Chapter 7 bankruptcy on July 10 after the Cedar Falls, Iowa-based firm and founder Russell Wasendorf Sr. were sued by the U.S. Commodity Futures Trading Commission.
The CFTC accused Wasendorf and the firm of misappropriating more than $200 million in customer funds. He has been charged with lying to U.S. agents and is being held in federal custody.
Peregrine filed for bankruptcy in Chicago, where it also maintained offices, listing more than $500 million in assets, more than $100 million in liabilities and more than 10,000 creditors.
The Labor Department doesn’t comment on the existence of ongoing investigations, Jason Surbey, an agency spokesman, said in a telephone interview today.
The bankruptcy case is Peregrine Financial Group Inc., 12-27488, U.S. Bankruptcy Court, Northern District of Illinois (Chicago). The regulatory case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-05383, U.S. District Court, Northern District of Illinois (Chicago). The criminal case is U.S. v. Wasendorf, 12-mj-131, U.S. District Court, Northern District of Iowa (Cedar Rapids).
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