By Jim Kharouf

I’ve known Russ Wasendorf, Sr. since early in my days covering the futures markets back in 1996. He was one of my sources, a key industry professional to speak with about all types of industry issues, trends, innovations and so on. He was often outspoken, sometimes brash in his criticism of exchanges and regulators, and a strong proponent of competition in the marketplace.

He was driven, accessible, articulate, demanding and tough. This is the futures marketplace, after all, and Russ was in the thick of it, trying to build one of the largest retail brokers in the business. So when the NFA alleged yesterday that his firm reported bank balances of $207 million in February 2010 and $218 million in March 2011, but actually held less than $10 million in each of those months, everyone wonders, how did it happen?

Regulators will be combing over records and transactions in the upcoming weeks to decipher how PFG ended up this way. That could explain why Russ tried to take his own life yesterday, running a tube from his tailpipe into his car on Monday morning.

When I look back at the firm and Russ himself, perhaps some of this is not all that surprising. He was a businessman who stretched his dealings far beyond the futures industry. One visible expense that was connected to the firm is the sprawling, modern headquarters, opened in Cedar Falls, IA. The facility is state of the art and cost millions to build at a time when the brokerage community was increasingly under price pressures. There was also the firm’s signature publicity event, American Heroes, which paid for big-time names such as US General Tommy Franks and former first lady Barbara Bush to come to the FIA Boca Conference. He moved that over to the CME’s annual fall conference, bringing names such as Mike Ditka, Dan Marino, Joe Torre and Johnny Bench; and last year topped them all by bringing George W. Bush and his entire family in.

There was a Romanian construction company, in which Russ was an investor, that lost millions and saw its Romanian CEO abscond with the firm’s money. There was also the restaurant, Allen’s New American Cafe, which he owned and eventually closed despite solid reviews.

Back on the futures side, he brought in a currency trading team to help bolster its currency brokerage business, as well as Alaron’s customer assets in 2009 and those of American National Trading in 2007.

PFG also was sued in February by a plaintiff who filed a $48 million lawsuit, alleging that one of PFG’s customers, Crown Forex/Trevor Cook had been running a Ponzi scheme and PFG had ignored repeated warnings.

You have to wonder if all of these expenses and losses just became too much for the firm and for the man who built the firm 20 years ago.