U.S.Bank in Cedar Falls has been ordered to pay $18 million to defrauded customers of a failed brokerage firm. The settlement is the result of a lawsuit filed by The U.S. Commodity Futures Trading Commission against Peregrine Financial Group. The suit claimed the bank should have known CEO Russell Wasendorf Sr. was stealing customer funds because the account was treated like a regular checking account. The suit alleges the bank allowed Wasendorf to transfer of millions of dollars to pay for his private jet, his restaurant, and even his divorce settlement.
U.S. Bank will pay the $18 million to the court-appointed trustee for Peregrine who will compensate the firm’s customers who had domestic futures accounts.
Wasendorf was sentenced to 50 years in prison for making false statements to a federal institution. He admitted to stealing more than 200 million dollars from his investors. He’s now in a federal maximum security prison in Indiana.