September 18, 2012
Attain Capital
Like
In one of the most recent developments in the PFGBest case, as customers await an initial distribution decision from the court, Russ Wasendorf Jr., the former PFGBest Chief Operating Officer and son of Russ Wasendorf, Sr., has filed a suit against U.S. Bank, alleging violations of commodity law that facilitated the fraud and theft of client money. The complaint is certainly worth a read, and can be found here.
But what does it mean? There are two things to consider. For starters, the suit is not seeking substantial monetary damages relative to the client losses, and technically, it’s not seeking it for clients. The plaintiff (read: Junior) is explicitly seeking that all guarantees between PFGBest and U.S. Bank be rescinded – in other words, that they not be on the hook for loans extended to PFGBest by U.S. Bank. The Washington Post explains further:
The lawsuit, filed in Waterloo last week, is an attempt by Wasendorf Jr. and his wife to rescind millions in business loans they guaranteed with personal assets to build Peregrine’s now-empty headquarters. The lawsuit claims the agreements should be void since the bank falsely assured the couple that Peregrine’s accounts were “in good order.”
In other words, this looks to be more of a play by Wasendorf Jr. to protect his assets (and his wife’s) rather than a heroic stand against US Bank in the name of the customers. But that begs the question of whether Wasendorf Jr. is even entitled to those assets… surely there were gifts, distributions of profit, bonuses, and salary paid to him out of what we now know to be customer money, not firm money – and those assets will be the subject of a class action suit somewhere down the line here (a few have already been filed, but a lead suit has not been chosen yet). The silver lining here – as far as former PFG customers is concerned – is the hope that these suits uncover something which will show some liability by a deep-pocket entity like US Bank. The article goes on:
Nicholas Iavarone, Wasendorf Jr.’s lawyer, said he hopes the lawsuit will uncover facts that will help Peregrine’s bankruptcy trustee and court-appointed receiver recover funds to compensate the 24,000 customers who lost money in the fraud.
While it may leave a bad taste in your mouth to root for Wasendorf Jr. in this case, one of the best case scenarios in this mess is for US Bank to be found to have done some wrongdoing and be forced to make customers whole as a result. Here’s hoping.
Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history. Individuals cannot invest in the index itself, and actual rates of return may be significantly different and more volatile than those of the index.
Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.
Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.
RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.
Limitations on RCM Quintile + Star Rankings
The Quintile Rankings and RCM Star Rankings shown here are provided for informational purposes only. RCM does not guarantee the accuracy, timeliness or completeness of this information. The ranking methodology is proprietary and the results have not been audited or verified by an independent third party. Some CTAs may employ trading programs or strategies that are riskier than others. CTAs may manage customer accounts differently than their model results shown or make different trades in actual customer accounts versus their own accounts. Different CTAs are subject to different market conditions and risks that can significantly impact actual results. RCM and its affiliates receive compensation from some of the rated CTAs. Investors should perform their own due diligence before investing with any CTA. This ranking information should not be the sole basis for any investment decision.
See the full terms of use and risk disclaimer here.
September 18, 2012
I think that hoping for the wrongdoing of US Bank is at least somewhat a good thing. However, the fact still remains the same, the money is lost and ¨hoping¨ to try to get my money back is not something I should be doing right now, nor anyone involved in this mess. Where is the NFA and the CFTC, they are as liable in my opinion as US Bank is. Why are they not making the clients whole. The answer is very clear in the financial markets. NO ONE IS LIABLE FOR ANYTHING.
September 18, 2012
Thanks for the summary.
I find it unfathomable that this fraud took Jr. by surprise though. He was most certainly complicit.
September 19, 2012
I totally disagree with you. I’ve read the complaint and see multiple ares of liability. Even without the information or belief, I see many areas of fault, and if any of the information or belief is in fact true, there should be little difficulty in finding fault with US Bank. If proper procedures were followed by US Bank, Waldendorf Sr. would have never been able to deceive and would have been out of business years ago. What this suit also showed is furthur deficiencies of NAF.
September 20, 2012
Wasendorf Sr. blames the regulators, Jr. blames the bank. Like father, like son.
September 20, 2012
Thanks Wasedorf Jr. for exposing negligence on the part of US Bank. I can’t believe were riding your coat tails. I’ll sleep better tonight.
Once again the deficiencies of NAF are exposed.
Let’s not stop digging as I don’t think we’ve exposed the extent of this fraud yet.
Like the old commercial, “I want my money and I want my money now”!