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February 08, 2012
NFA levies $700,000 fine against futures and forex firm Peregrine Financial Group
February 8, Chicago - National Futures Association (NFA) has levied a fine of $700,000 against Peregrine Financial Group, Inc. (Peregrine), a Futures Commission Merchant and Forex Dealer Member of NFA with headquarters in Cedar Falls, Iowa and Chicago, Illinois. Peregrine maintains branch offices in California, Florida, Illinois, Michigan and New York. The Decision, issued by NFA's Business Conduct Committee, is based on a Complaint filed in February 2012 and a settlement offer submitted by Peregrine, Russell R. Wasendorf, Jr., Peregrine's president, Susan O'Meara, Peregrine's director of compliance, and Nolan J. Schiff, Peregrine's director of managed foreign exchange. Peregrine, Wasendorf, O'Meara and Schiff neither admitted nor denied the allegations of the Complaint in making their settlement offer.
The Complaint alleged that Peregrine, Wasendorf, and O'Meara failed to supervise four of Peregrine's Guaranteed Introducing Brokers (GIBs): Clash Financial LLC (Clash, see previous press release), Oxford Trading Group, Inc. (OTG, see previous press release), California Capital Trading Group LLC (CCTG), and Patriot Financial Markets LLC. Complaints issued during 2010 and 2011 alleged that Clash, OTG and CCTG made trade recommendations that maximized commissions without regard for the best interests of their customers and that all four GIBs made deceptive sales solicitations. The Complaint also alleged that Peregrine, Wasendorf, O'Meara and Schiff failed to diligently supervise activities related to the firm's forex customers' accounts by failing to ensure the implementation of effective anti-money laundering (AML) procedures related to some of those accounts.
In addition to the $700,000 fine, the Respondents must retain an independent consultant to review Peregrine's existing procedures for supervising its GIBs and retail customer accounts and Peregrine is prohibited from entering into guarantee agreements with any IBs for a period of two years. Peregrine must also designate a full-time AML officer.
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