By Pam Martens: July 12, 2012
A deeply troubling message for America is unfolding around Russell Wasendorf, Sr., owner of Peregrine Financial Group, who lies in a coma in an Iowa City hospital after an attempted suicide with a hose attached to the exhaust pipe of his car outside the corporate monument he built to his wealth and success; a monument he sustained with money stolen from his clients. According to regulators, Wasendorf’s commodities and futures firm is missing at least $200 million of customer funds.
The troubling message is this: from Bernie Madoff’s cell in North Carolina, to $1.6 billion of missing customers’ funds at MF Global, overseen by a former U.S. Senator and Governor of New Jersey, Jon Corzine, to the news last week that some of the largest banks in the world had created a culture where their traders felt free to email and instant message instructions to cheat and rig one of the most important interest rate benchmarks in the world, to the bankrupt giants of 2008 – we may be moving from the lost decade to the lost generation. Exactly whom are today’s young people to look up to in the business world if everything is an illusion that eventually comes crashing down.
PFGBest, the trade name used by Peregrine, has an official company timeline on their web site showing the milestones along the career of Wasendorf. Two of the most noteworthy are honors the web site says were bestowed on the firm in 2011: the company won an Iowa Character Award from Character Counts in Iowa for organizations that “consistently demonstrate and promote the six pillars of character: trustworthiness, respect, responsibility, fairness, caring and citizenship.” The web site says it was also ranked number 1 in forex customer service in a June 2011 Smart Money Magazine feature. The magazine is a sophisticated publication that is owned by the Wall Street Journal.
According to records at the Iowa Secretary of State, Wasendorf owned five companies. Under the umbrella of those parents, Wasendorf ran a brokerage firm, a futures merchant trading firm, an upscale Italian restaurant (My Verona), a day care center for children (Best Kids Learning Center), an organic farm, an online trading magazine called SFO, and Peregrine Charities.
My Verona featured dining in a wine cellar as well as the “Boardroom,” offering “complete privacy for 12, decked out with wifi, phone communications, flat screens and more.”
The company published an employee newsletter showing children frolicking at the day care center and taking hay rides around the corporate grounds. Marketing photos of the My Verona restaurant are infused with exotic dishes and the happy faces of children coloring. Peregrine Charities focused on grants to services for children, distributing $1.3 million between 2005 to 2009, according to its federal tax filings.
In a luxurious cafeteria at the corporate headquarters, Wasendorf provided free breakfast and lunch to employees. Employees were also given a significant discount to dine at My Verona.
Now, it has all come crashing down. The trading company has filed for bankruptcy; the restaurant is closed; a post on the web site of SFO magazine reads: “Rest in peace… PFGBEST implosion shuts us down too.”