CHICAGO Aug 1 Several customers of Peregrine
Financial Group are suing the failed futures brokerage's chief
executive officer, Russell Wasendorf Sr., and other top
management for allegedly stealing more than $200 million in
Peregrine clients filed three separate lawsuits in July in
federal court in Chicago, each seeking class-action status. Late
on Tuesday, lawyers for two of those cases filed requests to be
reassigned to U.S. District Judge Rebecca Pallmeyer, who is
already hearing the Commodity Futures Trading Commission's civil
case against the firm and its CEO.
A judge will hear the motions on Thursday.
Wasendorf was arrested last month in Iowa after a botched
suicide attempt. He had left a written confession that he had
bilked customers for years, faking bank statements, lying to
regulators, and spending the money on everything from a brand
new office building in Cedar Falls, Iowa, to fines and fees
levied against the firm.
A grand jury in Iowa earlier this week subpoenaed
Wasendorf's son, Russell Jr., who was the firm's president, to
testify about his father's alleged wrongdoing. Wasendorf Sr. is
being held in a county jail.
The lawsuits by the clients borrow heavily from both the
CFTC's lawsuit and the FBI's criminal complaint against
Wasendorf Sr., but are different in that they target not only
him but also Wasendorf Jr., Peregrine Vice Chairman Neil Aslin,
Chief Financial Officer Brenda Cuypers, Chief Compliance Officer
Susan O'Meara and auditor Jeannie Veraja-Snelling.
The lawsuits also say they target 10 "John Does" whose
identities are not now known but who also allegedly helped in
"Defendant Wasendorf Sr.'s massive fraud and theft was
largely made possible by a failure of reasonable oversight,
inquiry and diligence by PFG's primary regulator, the NFA
(National Futures Association), and PFG's senior officers and
independent auditors," Hong Kong-based Power Vanguard, a former
Peregrine client, said in its lawsuit.
A Peregrine spokeswoman did not respond to a request for
The cases are Power Vanguard Ltd et al. v. Russell R
Wasendorf Sr. et al, 12-cv-05727; Wolinsky v. Wasendorf Sr., et
al., 12-cv-05624; and LaSalvia et al. v. Wasendorf Sr. et al.,
12-cv-5546, all in the U.S. District Court, Northern District of