Broker CEO Attempts Suicide, As $200m Of Client Monies Feared Missing

Reuters reports that more than $200m in customer funds appears to be missing from the accounts of U.S. futures broker PFGBest, regulators said on Monday just hours after the firm's founder attempted suicide outside the company's Iowa headquarters.

The New York Times reports that Russell Wasendorf, the firm's Chairman and CEO, was discovered in his car outside his company on Monday, according to local press reports. He was flown to University of Iowa Hospitals and Clinics in critical condition.

The suicide attempt and missing money renewed anxiety over the stability of the brokerage industry less than a year after the collapse of much larger MF Global. PFGBest told customers their funds had been frozen and clients would be allowed to liquidate open trading positions, but would not be able to withdraw funds or make new trades until further notice.

Bloomberg reports that The National Futures Association, the self-regulator for futures brokerages, said in a notice Monday that Peregrine reported it had about $400m in customer-segregated funds on or about June 29, of which $225m was on deposit at U.S. Bank. The regulator was then made aware that its chairman 'may have falsified bank records' and after finding only $5m was on deposit.

In the futures industry, customer money is not insured, meaning that if the cash is not recovered clients will have little recourse. Regulators have proposed a number of fixes, including setting up an insurance fund to guarantee the money.