DTN Ag News – The Peregrine Financial Group (PFG) has filed for bankruptcy following revelations that the brokerage firm misrepresented the amount of money its accounts designated to hold customer funds. Documents filed by the Commodities Futures Trading Commission show roughly $220 million is missing.
PFG is the second futures commodities merchant (FCM) in nine months to fail because of misuse of segregated customer funds. While not nearly as entrenched in the agriculture industry as MF Global, the similar cause of failure has put regulators in the hot seat.
The CME Group Inc. (CME) has announced family farmers and ranchers with assets caught up in the collapse of brokerage PFG will be eligible to use an insurance fund set up in the wake of the futures industry’s previous big scandal.
PFG clients can draw upon its $100 million guarantee, providing up to $25,000 per account to customers that suffer losses from the insolvency of a futures brokerage.
CME set up the fund as an added shield to users of its markets following the October 2011 implosion of MF Global Holdings.