By Nick Paraskeva
NEW YORK, July 17 (Thomson Reuters Accelus) - The CFTC approved tough customer protection rules for futures firms’ days after the Peregrine default led to over $200 million in missing client funds. Losses arising from a fraud by the owner of the futures broker come soon after a $1.6 billion hole in client funds from the collapse of MF Global. The new rules require daily calculations of client money to be reported, and for senior management to certify cash movements.
The CFTC charged Peregrine Financial Group, and its owner Russell Wasendorf, Sr, of misappropriating customer funds. A recent audit of Peregrine by the National Futures Association (NFA), the self-regulator for independent futures firms, found the firm falsely represented it held $220 million customer funds at a bank account, which only had $5.1million. The firm filed for liquidation Friday, and its owner was arrested. (more…)