PFGBest declared Chapter 7 bankruptcy last night, after the Commodity Futures Trading Commission filed a lawsuit accusing it of fraud, lying to regulators, and abusing customer funds. Regulators believe Russell Wasendorf, who tried to kill himself Monday, had been fabricating bank balances and forging signatures on the documents he submitted to the industry's self-regulating body, the National Futures Association, for years, Reuters reports. Now regulators believe at least $215 million in customer funds are missing.
The scandal has echoes of that at the larger MF Global—and indeed, regulators first became suspicious when Wasendorf resisted their push to switch to an electronic method of verifying customer account balances in the wake of that scandal, the Wall Street Journal reports. "It's déjà vu all over again," says the cofounder of a group set up to recoup MF Global money for customers.