Ruling regarding 10$ million settlement to PFG Clients

Judge Doyle is set to rule today on a settlement which was requested by an Illinois federal judge in respect to the trustee overseeing ill-fated   Peregrine Financial Group (PFG)’s bankruptcy, whereby the judge was asked to approve a $10 million settlement reached with the receiver recovering funds from a Ponzi scheme run by jailed Crown Forex SA principal Trevor Cook.

Chapter 7 trustee Ira Bodenstein asked Judge Carol A. Doyle to approve the settlement two weeks ago, which would release the Peregrine estate from all but one of attorney R.J. Zayed’s claims, including allegations that Peregrine managers ignored red flags as Mr. Cook and his cohorts sent them $48 million in illegal profits from his scheme.

The settlement addresses a set of consolidated claims alleging that Mr. Cook maintained accounts with Peregrine that were funded with money he stole in his Ponzi scheme, Mr. Bodenstein said.

“The parties have engaged in significant and substantive negotiations that culminated in the proposed settlement and stipulation,” the motion says.

“As a result of his examination of the claims and the complaint and the potential costs of litigating and liquidating them, the trustee has concluded in the exercise of his business judgment that the proposed settlement is in the interests of the estate.”

Trevor Cook was sentenced in August 2010 to 25 years in prison for bilking thousands of investors out of at least $190 million in his fraudulent FX scheme.

Zayed’s suit, filed in Minnesota federal court months before Peregrine entered bankruptcy, alleged that two Peregrine managers, Nolan Schiff and Ryan Peterson, ignored obvious signs that Mr. Cook’s funds were not segregated and therefore exposed to risk as Mr. Cook “scrambled to use funds from one account to cover a margin deficiency in another” over the course of their dealings.

Mr. Cook’s desperate emails sent to Peregrine as he tried to cover various margin calls “were objective evidence of fraud,” yet Peregrine “focused on one thing only: limiting its own financial exposure,” the complaint said.

Peregrine’s public woes began July 9, 2012, when the National Futures Association took action against the firm, and its CEO Russell Wasendorf Sr. was found unconscious in a car outside the firm’s offices in Cedar Falls, Iowa, in an apparent suicide attempt, prior to his sentencing to 50 years in jail.

PFG Clients UNBELIEVABLY still remain high and dry with only minimal repayments of account balances returned to most, despite the fact that the Trustee has tens of millions left and available in bank accounts to distribute - Hopefully this settlement of $10 million releases some of the capital that the Trustee has seen fit to hold back and ripped off PFG clients see more of their own money back very soon. NO-ONE should get any money until every single PFG Client has received all their money back, why are some "creditors" seen to be preferential over PFG Clients who had their funds stolen from them - PFG clients are not creditors, they are sadly victims of crime.