Let’s start by identifying the different types of white collar crime (WCC). One is WCC involving individuals against companies (e.g. theft of property from a company) and the government (e.g. Medicare fraud) and the other is WCC of individuals within companies (e.g. MBS debacle) and the government (e.g. taking bribes to favor contractors) against people in our society. The latter is typically punished and prosecuted less frequently or not as severely than the former for different reasons, one of which is the bias to protect the institution and sweep things under the rug. For instance, a person is allowed to resign, but they’re not prosecuted, so that bad press doesn’t come down on the institution or the supervisors of the criminal actor. More on Business Insider here.
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The U.S. futures regulator acknowledged on Tuesday that the regulatory system “failed” the customers of Peregrine Financial Group, which collapsed last week as its founder admitted he had committed a $100 million fraud that spanned two decades. In testimony before the Senate Agriculture Committee, Commodity Futures Trading Commission Chairman Gary Gensler will outline his agency’s plans to contain the fallout from the Peregrine case, which has shaken investor confidence in the futures markets. Read Reuters report here. [...]

The U.S. Commodity Futures Trading Commission reviewed operations at Peregrine Financial Group Inc. at least twice since 2006 without detecting the fraud that led to the collapse of the futures broker and a $200 million shortfall in client funds. The Washington-based agency conducted examinations at Peregrine in 2007 and 2008, according to a list of CFTC reviews obtained through a public records request. The list, which includes reviews between 2006 and Nov. 9, 2011, does not detail what records or procedures examiners evaluated. More in the San Francisco Chronicle [...]

Two of the world’s financial capitals are hurting. London, Europe’s trading hub, and Chicago, America’s bridge between the farm and the global commodity markets, have been rocked by scandals. The controversy over the London interbank offered rate, or Libor, and the unraveling of the brokerage Peregrine Financial Group Inc. share only their timing. But their collision in the headlines is deepening investors’ antipathy toward the financial industry, capital markets and regulators. Read Wall Street Journal report here. [...]

He’s the Midwestern Madoff. Russell Wasendorf, founder of a small town Iowa brokerage firm, Peregrine Financial Group, and a pillar of his community, admitted to stealing $100 million of customer cash over a couple of decades. Like Ponzi King Bernie Madoff, the 64-year-old Wasendorf has been committing fraud for the better part of his 32-year career to help fuel a lifestyle complete with a corporate jet, lavish homes and substantial charitable contributions. Read New York Post report here.
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Hey, Charlie, wherever you are—and one thing for sure it isn’t in heaven—you can rest easy, secure in the knowledge your legacy, if not your corporeal being, lives on. The Charlie in question is, of course, the infamous Charles Ponzi, who perfected the scheme bearing his name in 1920 or thereabouts, fraudulently took in the equivalent today of upwards of $200 million and wound up, in part due to the efforts of Clarence Barron, founder of this blessed magazine, in the slammer. Read more in Barron’s [...]

Hours after news flashed last week that futures brokerage Peregrine Financial Group Inc. was imploding, Greg Sabatello’s phone was jammed with customers questioning the safety of their money in his $70 million electronic-brokerage firm, TransAct Futures in Chicago. Mr. Sabatello, president of TransAct, told clients their money was safe, but some didn’t take his word for it. Instead, they asked for some of their money back, to make sure it was there, he said. More in the Wall Street Journal [...]