Peregrine Financial Group- Case Study
CEO, Russell Wasteland, was no different than others high profiles executives, living a high fife 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.
. Wasteland 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 lion could not be easily hidden, so Wasteland 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 NFG. 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..
Wasteland 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 hat, 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 Wasteland could manage to forge bank documents and financial record for such a long time, the clear response is the lack of controls and oversight. This has become a major problem over the last financial scandals as well.
The Commodity Futures trading Commission which main objective as per its website is “mission is to protect arrest users and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives that are subject to the Commodity Exchange Act, and to foster open, competitive, and financially sound markets” (http://www. Cuff.
Gob/ About/Incomprehensibility’s/index. HTML), most certainly failed its role in this case as well. Control agency is responsible to oversight, In this specific case, all the controls failed for long time, Wasteland managed to find cracks into the system and keep it for long time.
Most certainly, CEO, as many other fraudster had a clear titivation to continue with the fraud, is someone managed to misstated financial statement for nearly 20 years, and built a built and entire fortune, steeling funds from his clients, so why not keep going Furthermore NFG auditors in charge of auditing AFT books missed a key event, when performing balance confirmation in 2011 to US bank (AS 67), they received information that PEG has only a balance of $7,18 million and 3 days after received other email correcting the balance to $218 million, this could not flagged up more the fraud, however the auditor passed it and 10 not Tallow up.
I Nils case release once again ten role AT control agencies. It n become a common practice to have lesson learnt papers always after a big fraud scandal happened, however, despite the fact of increasing controls and laws, frauds are still going on, so the question The case is still going on, CEO has been sentenced to 50 year in prison and huge fines, however this sentence does not solve the issue of the harm caused to third party and the fact that the $200 million are still under search.
The lesson learnt for this case are not much different from other big fraud asses, nevertheless, this type of cases keep going on.
Further to the criticisms of lack of controls and not proactive role of control agencies. It is clear that something has to change.. It has become a common practice to have lesson learnt papers always after a big fraud scandal happened, however, despite the fact of increasing controls and laws, frauds are still on.
This case is only one more of hundreds of White Collar crime, most of them; do not make it to headlines. It is up to society to ensure all this type of fraud are follow up and persecuted to ensure proper punishment to white collar Iranians.
In the other hand, persecuting this type of criminals is not always easy, and built up a case could be really costly, perhaps that is one of the reasons, mot of fraud cases within small-medium companies remain within References David O. Frederic’s (2010). Trusted Criminals: White Collar Crime in Contemporary Society [Viticulture Bookshelf] Berkeley research group, LLC (2012).
Analysis of the national futures association’s audits of peregrine financial group, Inc. Retrieved from http://www. NFG. Futures. Org/news/BRB/executive_summary.