Rumors of another MF Global type of debacle surfaced early last week as Peregrine Financial Group filed for a Chapter 7 bankruptcy under the U.S. bankruptcy code. The company, based in Cedar Falls, Iowa, claims between $500 million and $1 billion in assets and between $100 million and $500 million in liabilities. The filing also claims 10,000 to 25,000 creditors.
The National Futures Association put PFG under emergency enforcement action following news of the CEO's attempted suicide on Monday, July 9. PFG may have been tripped up by enhanced monitoring that came as a result of last fall's failure of MF Global. Enhanced regulatory oversight includes electronic monitoring of brokerage monies at financial institutions where companies keep their cash.
Iowa Commodity Brokerage Firm Goes Under
A federal regulator last week pushed the PFG company for documents that could help the government find some of the $200 million it says is missing from the Cedar Falls futures brokerage firm. The U.S. Commodity Futures Trading Commission says it "has reason to believe that substantial PFG customer funds may have been transferred to third parties."
Grassley seeks scrutiny of commodity broker regulatory system
U.S. Sen. Chuck Grassley, R-Iowa, is asking the leaders of the Senate Agriculture Committee to address the PFG broker scandal during a hearing scheduled for August 1 about the loss of funds by farmers, grain co-ops and commodity brokers when MF Global' s broker-dealer unit collapsed late last year.