Peregrine Financial Group- Case Study
Peregrine Financial Group- Case study
Last July 2012, a new financial fraud came out and hit the news headline, déjà vu, perhaps of other famous scandals, but not. This time a medium size financial institutions, name “ Peregrine Financial Group Inc” accused of shortfall of funds for around $200 million, where its CEO, Russell Wasendorf managed to misstated financial record for over 20 years, and finally in July 2012 filed for Bankruptcy.
CEO, Russell Wasendorf, was no different than others high profiles executives, living a high life style including private jets and several other companies, thus, it was difficult at first impression to flag up this CEO as a fraudster. Within regulatory agencies, Mr. Wasendorf was not a target as potential criminal based on his life style as many other; furthermore, He was a well-respected man in his own home state, Iowa. A CEO who was seen as professional and ethical with a luxury life style, was not particular a clear sign of what He was cooking under the table., even more, he did not fulfill the profile of fraud perpetrator
Obviously, this CEO saw an opportunity to embezzle, $200 million could not be easily hidden, so Wasendorf managed to misstated accounting records to keep up with the fraud for a long time, he perfectly knew the flaws in the internal control process performed by control agency such a NFA. As time passed by the fraud figures were increasing, this is how he builds a huge empire of other business and use account holder´s money for his lavish lifestyle. . Wasendorf was full-filling the fraud triangle, in a slight different way. He was already a wealthy men, so, there was not financial need, it this particular case, was more greed, on top of that, he knew the system weakness in order to misstated bank balances from his own employees and control agencies, and for 20 years, He never saw himself as a criminal, he never even consider that he was stealing from others to build up a fortune.
How Wasendorf could
Last July 2012, a new financial fraud came out and hit the news headline, déjà vu, perhaps of other famous scandals, but not. This time a medium size financial institutions, name “ Peregrine Financial Group Inc” accused of shortfall of funds for around $200 million, where its CEO, Russell Wasendorf managed to misstated financial record for over 20 years, and finally in July 2012 filed for Bankruptcy.
CEO, Russell Wasendorf, was no different than others high profiles executives, living a high life style including private jets and several other companies, thus, it was difficult at first impression to flag up this CEO as a fraudster. Within regulatory agencies, Mr. Wasendorf was not a target as potential criminal based on his life style as many other; furthermore, He was a well-respected man in his own home state, Iowa. A CEO who was seen as professional and ethical with a luxury life style, was not particular a clear sign of what He was cooking under the table., even more, he did not fulfill the profile of fraud perpetrator
Obviously, this CEO saw an opportunity to embezzle, $200 million could not be easily hidden, so Wasendorf managed to misstated accounting records to keep up with the fraud for a long time, he perfectly knew the flaws in the internal control process performed by control agency such a NFA. As time passed by the fraud figures were increasing, this is how he builds a huge empire of other business and use account holder´s money for his lavish lifestyle. . Wasendorf was full-filling the fraud triangle, in a slight different way. He was already a wealthy men, so, there was not financial need, it this particular case, was more greed, on top of that, he knew the system weakness in order to misstated bank balances from his own employees and control agencies, and for 20 years, He never saw himself as a criminal, he never even consider that he was stealing from others to build up a fortune.
How Wasendorf could
References: David O. Friedrichs (2010). Trusted Criminals: White Collar Crime in Contemporary Society [VitalSource Bookshelf] Berkeley research group, llc (2012). Analysis of the national futures association’s audits of peregrine financial group, inc. Retrieved from http://www.nfa.futures.org/news/BRG/executive_summary.pdf