Skip to main content

The Globe and Mail

Regulator orders wind-down of Peregrine in Canada

Exterior view of the Peregrine Financial Group headquarters at One Paragon Way in Cedar Falls, Iowa, July 11, 2012.

Matthew Putney/Reuters

Canada's financial industry regulator has suspended the membership of Peregrine Financial Group Canada and ordered a wind-down of the company, whose parent firm is at the centre of fraud allegations in the U.S.

The Investment Industry Regulatory Organization of Canada said after an expedited hearing Thursday that it decided to immediately suspend Peregrine's membership and bar it from dealing with the public.

The financial services firm has also been ordered to remove its website from public access.

Story continues below advertisement

It also cannot engage in certain activities without the written consent of IIROC. Those activities include: reducing its capital or indebtedness, making payments to executives and increasing the non-allowable assets of the firm.

Peregrine will work with IIROC staff to develop a plan to wind down operations, through liquidation or a similar process, no later than Aug. 20.

The company is also ordered to keep all books and records in tact and at its head office in Mississauga, Ont.

Earlier this month, the firm's parent company, an Iowa-based brokerage, became the focus of a complaint from the Commodity Futures Trading Commission that accused owner Russell Wasendorf of falsifying bank statements and being unable to account for about $220-million of customer funds.

Mr. Wasendorf's business empire collapsed last week after he was found unresponsive in his car outside Peregrine's headquarters in Cedar Falls following a suicide attempt. He left a note in which investigators say he detailed how he embezzled customer funds for nearly 20 years and falsified bank records to fool regulators.

Federal regulators shut down his firm, which was missing more than $200-million in customer accounts that it claimed to have, and it filed for bankruptcy.

Last week, IIROC said that clients at the Canadian subsidiary of Peregrine shouldn't lose any money because those funds were located, and will be transferred to RJ O'Brien & Associates Canada.

Story continues below advertisement

Report an error
As of December 20, 2017, we have temporarily removed commenting from our articles. We hope to have this resolved by the end of January 2018. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.