Brokerage Shortfall Puts CFTC on Spot

Peregrine Fund’s $200 mln in missing funds renews scrutiny of regulator.

The main U.S. futures regulator is facing renewed scrutiny after suing Peregrine Financial Group Inc. for a customer funds shortfall nine months after MF Global Holdings Ltd. collapsed.

The Commodity Futures Trading Commission filed a complaint against Peregrine in federal court in Chicago yesterday after an industry-run regulator cited a $200 million shortfall in customer segregated funds. The National Futures Association said the brokerage’s chairman may have falsified bank records after only $5 million was found in an account that was reported to have $225 million on or about June 29.

‘Working Diligently’

“I want to know if the existing set up with the National Futures Association and the Commodity Futures Trade Association is working to safeguard this marketplace,” Grassley said in a statement. “Regulators need to be on the ground working diligently to sort out what’s going on.”

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