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PFGBest freezes funds after founder's suicide attempt


(Reuters) - Independent U.S. futures broker PFGBest said it had effectively frozen customer accounts on Monday after a suicide attempt by the company's founder, Russell R. Wasendorf Sr, set off an investigation into possible "accounting irregularities."

In a dramatic turn that may trigger a new round of anxiety over the stability of the brokerage industry less than a year after the collapse of much larger MF Global, the Cedar Falls, Iowa-based firm told customers that they would be limited to liquidating open positions until further notice.

More from Reuters...
http://www.reuters.com/article/2012/07/10/us-broker-pfgbest-mfglobal-idUSBRE86905120120710

...about $220 million in customer funds were not in the brokerage's bank accounts...

...PFGBest was less than one-tenth the size of MF Global, the fallout may be larger...

...One former employee of the firm said he had grown concerned that Wasendorf didn't do more to distance the company from a massive $194 million forex-trading Ponzi scheme run by Trevor Cook in Minnesota, who admitted defrauding more than 700 investors. Cook is serving 25 years in prison...

...PFGBest, which had acted as Cook's broker, was fined $700,000 by the NFA for failing to notice the scheme...

...on Monday, after receiving information that PFG's founder and owner may have falsified bank records, the NFA said that only $5 million was on account at the bank days earlier...
Quote; Reuters
Unlike the securities markets, customers of futures brokers do not enjoy any government or industry-backed insurance schemes in the event funds are stolen or go missing

I was shocked to read the above quote from Reuter’s article. I was always under the assumption that we are fully insured, either by the broker insurance, or by a government agency like the FDIC. This is something very strange and begs a lot of questions like why “They” would allow the industry to operate under such conditions
I would like to take this opportunity and warn any trader who has an account with AMP “GET OUT AS SOON AS YOU CAN” these guys are outright thieves I had to call the police on them, they will play with the margin or with your account any which way they want and make “new” rules as they go I hate to come here and tell you “I told you so
(This is a post I placed in another forum but I think it worth to mention it everywhere)
http://dealbook.nytimes.com/2012/07/10/regulators-charge-futures-brokerage-with-fraud/

...seeking a restraining order against the Peregrine Financial Group, also called P.F.G., to prevent the destruction of any information that may be needed in the course of the investigation...

...the firm had been falsifying its records as far back as 2010...

...After the fiasco at MF Global, which left customers missing more than $1 billion, regulators vowed to ensure the safety of customer money. Both the N.F.A. and the C.F.T.C. conducted reviews of futures firms to reassure investors. The regulators granted them all clean bills of health...
The regulators granted them all clean bills of health...

Is it a joke or they are serious??!!
This is the same regulator who gave a “Clean bills of health” to Madoff and el I think the only “Bill” they are going to give is to the customers i.e. US
Apparently Wasendorf had been forging bank documents for 20 years...

http://news.yahoo.com/insight-pfgbest-regulator-known-inexperienced-auditors-012859011--sector.html