Eight months after the surprise collapse of MFGlobal, another respected futures brokerage, PFG, is being sued for fraud by US regulators and has reportedly also gone bankrupt.

In a complaint filed on Tuesday in an Illinois federal court, the US Commodity Futures Trading Commission accused Peregrine Financial Group and its sole owner and chief executive, Russell Wasendorf, of misusing customer funds.

The Wall Street Journal reported late on Tuesday that PFG had filed for bankruptcy under Chapter 7, meaning that its assets will be liquidated.

The CFTC alleged that PFG and Wasendorf – who it said tried to commit suicide at PFG’s Iowa office on Monday and is thought to be in a coma –”failed to maintain adequate customer funds in segregated accounts”.

The CFTC alleged they falsified information in filings and overstated the company’s bank deposits, leaving a shortfall that currently, and has previously since 2010, exceeded $200 million.

The CFTC alleged that PFG and Wasendorf used funds for purposes other than those intended by its customers, and said “the whereabouts of the funds is currently unknown.”

Tuesday is a “sad day for the futures industry (and) what’s left of PFG,” said Phil Flynn, an energy analyst who left the company on May 31.

Flynn told AFP that one of the reasons he quit the company was news reports saying that PFG was allegedly involved in a Ponzi scheme in Minnesota.

Since February a string of US press reports, in Minnesota and in Iowa – where PFG is based – have suggested links between PFG and a $200 million Ponzi scheme run by Trevor Cook, who is serving a prison sentence.

Victims of Cook’s scheme filed a federal lawsuit against PFG, alleging the firm played a key role in the fraud.

“I had concerns based on what I was reading,” Flynn said. “I had no proof that they were doing anything wrong.”

Flynn said “apparently everybody is gone” at the company where he worked for five years. The financial press has evoked layoffs by the hundreds at PFG.

Peregrine executives were not immediately available to comment on the lawsuit.

The Federal Bureau of Investigation said it was involved in the case.

“We are assessing the situation and reviewing the facts,” said an FBI spokeswoman in Omaha.

The CFTC suit came a day after the National Futures Association, responsible for monitoring PFG for compliance with reporting requirements, took an emergency enforcement action against PFG and Peregrine Asset Management.

The NFA blocked new or additional customer accounts or funds, alleging PFG had failed to prove it had met capital and segregated funds requirements.

According to a July NFA audit, “PFG falsely represented that it held in excess of $220 million of customer funds when in fact it held approximately $5.1 million,” the CFTC said.

The PFG troubles evoked memories of the spectacular collapse of the much larger MFGlobal last October and the disappearance of more than a billion dollars in customers’ funds.

James Williams, an energy specialist at WTRG Economics, lamented the latest blow to the markets.

“Commodities trading has an increasingly bad image,” he said, adding that the majority of traders are “straight-up and honest people.”

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