Toronto Investor Sues Wasendorf, Other Peregrine Officials, U.S. Bank

An investor from Toronto is the latest to file a lawsuit against Peregrine Financial Group's embattled chief executive, Russell Wasendorf Sr.

Wasendorf, the founder of Peregrine, also called PFGBest, has been indicted on federal charges connected to a missing $200 million from the company.

Last week, , 64, of Cedar Falls, pleaded not guilty to 31 counts of making and using false statement. Wasendorf was arrested in July after attempting suicide as regulators closed in. In his suicide note he allegedly admitted to stealing over $200 million of his customers' money over 20 years. His international brokerage firm, based out of Cedar Falls, is in bankruptcy.

On Monday, Gobind Modi, of Toronto, filed a class action lawsuit against Wasendorf and other senior Peregrine officials, including Wasendorf's son, Russell Wasendorf Jr., Neil Aslin, Brenda Cuypers, and Susan O'Meara, according to court documents. Jeannie Veraja-Snelling and Veraja-Snelling Co. (auditors), US Bank, the National Futures Association, and John Does 1-10 are also named in the lawsuit.

The suit stems from Wasendorf Sr.'s "commingling and theft" of more than $215 million that belonged to Modi and Peregrine's other "approximately 24,000 futures account customers," according to the lawsuit.

The other defendants failed to "exercise reasonable oversight, inquiry, and diligence with regard to PFG, facilitating and enabling Wasendorf Sr.'s unlawful conduct, leading to bankruptcy of PFG," which caused the loss of funds of Modi and the other investors, according to the lawsuit.

The Waterloo-Cedar Falls Courier reports:

Although Wasendorf Sr. said in his signed statement that he acted alone and hid his company's true numbers, the suit alleges others beside Wasendorf Sr. knew or should have known something was amiss at PFG or failed to properly oversee the trading firm.

US Bank should have known that the actual segregated account balance was too small to cover the requirements of a firm the size of PFG, the suit alleges.

Modi is at least the fifth investor to sue Peregrine, the Courier reports.