It appears as if it’s the end of the road for futures brokers PFGBest. The Iowa based trading company, accounts have been frozen by industry regulators Apparently, $220 million in customer funds were reported to have gone missing.
In light of what has been reported as ‘accounting irregularities’, PFGBest revealed on Monday that it would put a hold on client accounts and also liquidate operations. Today’s freezing is actually an outgrowth of yesterday’s problem, and a confirmation that it will no longer be ‘business as usual’ at PFGBest.
This adds yet another chapter to PFGBest’s string of problems. Yesterday, the company revealed that Russell Wasendorf- the CEO- made an attempt on his life; perhaps reflecting the strife and uncertainty that stems from PFGBest’s future.
The National Futures Association (NFA), alongside other officials, spearheaded the move to put a hold on PFGBest’s assets. The NFA also states that it had taken the extra step and enforced emergency action against Peregrine Asset Management Inc. and PFGBest parent company, Peregrine Financial Group Inc., which has a clearings relationship with Jefferies Group, Inc. (NYSE:JEF)
NFA also made other shocking revelations that raised questions on Wasendorf’s honesty and more so the honesty of the company. According to the NFA, PFGBest claimed to have more than $225 million in deposit at the U.S bank. However, the NFA has established that PFGBest had approximately $5 million on deposit in the U.S bank. The NFA also made mention of the information it received regarding Wasendorf’s alleged falsification of bank records.
Although clients of the firm have been notified about the ongoing problem, details of what will to happen to their funds are still sketchy. There is no conclusive direction as of yet. “Now there’s really nothing I can do, or any of the other account holders can do,” said Kevin Davey, a 45 year old year old Cleveland based trader with ties to the firm. His outlook is a representation of the despondence that shrouds PFGBest clients.
The estimated 200 employee jobs are now at risk as well. The company spokesperson did reveal that their jobs were at risk.
A source close to the matter revealed that the employees were aware of their dim fate. The source states that the onset of liquidation imposes many uncertainties over the firm’s ability to pay its current employees.
PFGBest joins MF Global Holdings Ltd (PINK:MFGLQ) which also bit the dust last year in somewhat similar circumstances, late last year.