PFGBest Update: Not Quite Man’s Best Friend

As the PFGBest scandal has played out, a variety of lawsuits have been filed against a host of entities. From our perspective, it has always been a “wait and see” type scenario, but in the case against Russ Wasendorf, Jr., attaining further assets may prove difficult. The Wall Street Journal reports:

Mr. Iavarone said Mr. Wasendorf Jr. intends to contest the allegations. If the judge keeps Mr. Wasendorf Jr. in the case, Mr. Iavarone said he would advise his client to file for bankruptcy. “The legal bills from this are going to be enormous,” he said.

There is little public information about Mr. Wasendorf Jr.’s finances. Over the second half of 2011, privately held Peregrine paid him a monthly salary of $18,750, as well as three bonuses ranging from about $10,900 to about $12,700 each, according to court filings. Mr. Iavarone said Mr. Wasendorf Jr. isn’t wealthy and sold his Cedar Falls home in part to raise funds.

In fact, Jr. seems to believe that he is truly the victim here:

In a message posted on his Facebook page Nov. 30, according to Mr. Iavarone, Mr. Wasendorf Jr. wrote that “one person’s horrific and unimaginable bad choices” left a “trail of devastation and debris.”

“So many people have been supportive,” he wrote. People close to the family “know how badly we were damaged and that we were the first unsuspecting victims as the storm hit. There are, of course, others that want to ‘kick the dog.’ I feel their anger and frustration.”

While his sympathies are appreciated, if you ask us, in no way is this “kicking the dog.” From what we saw at PFGBest, Russ Sr. was essentially a figurehead at the company over the past several years while Russ Jr. was running the day to day operations. So there are two options here. Either Wasendorf Jr. knew full well what his father was doing and participated in the scam, OR he didn’t know, as Chief Operating Officer, anything about where nearly half of the firm’s assets were, in which case he demonstrated gross negligence and a disregard for his fiduciary duty to the firm’s customers and its employees. Michel Dell’Angelo, one of the attorneys pursuing the class action suit, put it rather succinctly:

“There’s no doubt that someone who was president and chief operating officer of the company, and who was making strident assurances to customers about the safety of their money, has some measure of culpability.”

Well put.

Write a Comment

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.

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.

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.

See the full terms of use and risk disclaimer here.

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.

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.

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.

See the full terms of use and risk disclaimer here.