By John J. Lothian
Sometimes you need to use your outdoor voice. Sometimes inside. When I heard yesterday that the NFA procedure for verifying the bank balances at U.S. bank for Peregrine Financial Group was to send a request for verification letter to a post office box, I used my outside voice again. I then used my “I need to be careful not to bring down the building voice” when I heard that the post office box was registered in the name of Russell Wasendorf, Sr.
This is what I was told by regulatory sources yesterday and which Ann Saphir reported at Reuters. And I still don’t believe it possible, but it is.
If you hear a man yelling loudly, or crying softly in the CBOT Building, it might just be me.
Broker Me This
My former Price Group colleague-for-a-month Phil Flynn, who joined the firm at the end of May (I left officially at the end of June) was the subject of a lengthy interview on Fox Business yesterday about his previous employment with PFGBEST. Phil joined The Price Group from PFGBEST.
Fox host Melissa Francis badgered Flynn with some tough questions about why he would go to a firm, PFGBest, that had such a bad compliance record. Flynn’s argument was that there were a lot of firms on the street with lots of compliance problems, so in some ways PFGBEST was not out of step or unusual.
Flynn had come to PFGBEST from Alaron when that firm was acquired by PFGBEST. He had run a division at Alaron.
PFG’s Big Break
You can tell a lot about the future of a company by the foundation it was built on.
Peregrine Financial Group got its big break back in the middle 1990s when a firm named First Commercial Financial Group was forced by regulators to move its customer business due to financial irregularities. First Commercial business was moved to Peregrine and to RB&H, the firm headed by then CME Chairman Jack Sandner. Former CME Chairman Larry Rosenberg was CEO of First Commercial.
It is safe to say that Mr. Wasendorf did not get the pick of the litter when the customer business, which cleared at RB&H, was split up between RB&H and Peregrine. First Commercial was a party to 75 CFTC reparation cases and a respondent to 10 NFA arbitrations prior to their registration finally being revoked by the NFA in 1996.
Mr. Wasendorf and his firm Wasendorf & Son was also involved with another CME-related firm that had its own unhappy ending, GNP Commodities, headed by one-time CME Chairman Brian Monieson. GNP was the party to 117 CFTC reparation cases and five NFA arbitration awards. GNP also had two NFA, three CFTC and six exchange regulatory actions against it before its registration was revoked.
Of course Alaron also had its problems. It was a party to 55 CFTC reparation cases, was a respondent to 12 NFA arbitration cases and two NFA, two CFTC and 15 exchange regulatory actions. By contrast, Peregrine was party to 38 CFTC reparation cases and 31 NFA arbitration awards, as well as four NFA and one CFTC regulatory actions.
The Price Group has been a party to one CFTC reparations case, three NFA arbitrations and one NFA regulatory action. Not all cases are losses for firms, so you have to read the details for each.
While that sounds like convenient tooting of The Price Group’s horn, it’s not. The Price Group is not the only quality firm in the brokerage space today. But it’s not luck that firms who do right by their customers, earn their upstanding reputations as a result.
Phil Flynn made a good decision to come to The Price Group. He made a better decision to leave PFGBEST.