Mr. Wasendorf was found in his car on the morning of July 9 outside Peregrine’s headquarters in Cedar Falls, Iowa, after an apparent suicide attempt.
“I have committed fraud,” he wrote in a signed statement found in his car by his son, Russell Wasendorf Jr., Peregrine’s president. Mr. Wasendorf Sr. wrote that he had used computer software, scanners and laser printers to falsify bank documents for nearly two decades, according to the complaint.
Ok. Go meet Bubba. Stay there.
That’s one pair of handcuffs. I want to know where the other ones are.
Like for the NFA, which allowed this clown-car brigade to operate for two decades with an “auditor” that was a single practitioner engaged to “audit” a $500 million enterprise that happened to have (allegedly) that much customer money “safely held”, and never bothered to make one damned phone call to the alleged bank holding the funds to verify documents as authentic.
Like for the CFTC that allegedly was checking these futures merchants after MF Global and pronounced that they would determine (on November 10th of 2011) whether segregated funds were being “properly maintained”?
“Segregation of customer funds is at the core of customer protection in the commodity futures and options markets and must be maintained at all times,” said Commissioner Sommers. “I have complete confidence in the dedicated men and women in Enforcement to carry out the necessary investigation to get to the bottom of what happened at MFGI. Aside from the investigation, we will do everything in our power to ensure public confidence in the markets by directing a review of clearing futures commission merchants (FCMs) to determine that segregated funds are being properly maintained in accordance with the CEA and Commission regulations.”
So are they all the members of the CFTC going to be arrested since they obviously didn’t do what they said they’d do?
Like for JP Morgan’s Jamie Dimon, who today it appears disclosed that his CIO office may have falsified marks to try to hide the losses taken in that office, not to mention being less-than-candid about what was being traded, in what size and why. Not only is falsifying marks (if it happened) fraud, but in addition Sarbox requires Dimon to be criminally and civilly responsible for the truthfulness of the financials in total, and it’s quite clear that he looked the other way!
Dimon had brushed off concerns raised by some of his most senior advisers, including heads of JPMorgan’s investment bank, about the lack of transparency and the quality of internal controls in the CIO in recent years, Bloomberg News reported last month, citing a person with direct knowledge of the matter. He exempted the unit from the rigorous scrutiny applied to risk management in the investment bank, two people said at the time.
Sarbanes-Oxley was passed to prevent that excuse from working as it was repeatedly run during the tech years when firms blew up — the old “I didn’t know” defense. Under Sarbanes-Oxley if you willfully avert your eyes you get tagged anyway.
That is, if the law was to ever be enforced, which it isn’t.
Or how about John Corzine? Need I bother with that?
It appears that Mr. Wasendorf’s biggest offense, and the one that now looks to be sending him to the slammer, was that he didn’t make enough (or any) political contributions to the two major parties.
Oh, wait, that would be bribery and, at least in theory, would be another crime.
But that doesn’t count either, does it?
We will never have an economy that works for everyone, not to mention an actual economic recovery, until “The Bezzle” is brought under control. And there is only one way to do it — start jailing people. “Fines” do nothing as they’re simply shifted to the customer, effectively robbing the consumer twice.
We literally are and have been in scandal of the week mode here since the middle of the 2000s, and anyone who expects business people to invest in long-run capital projects or hire employees as long as this trend continues is nuts.