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Peregrine CEO in Custody Following Guilty Pleas

The former head of Peregrine Financial Group is in jail after pleading guilty

The former CEO of Peregrine Financial Group is still in jail after pleading guilty to defrauding investors out of roughly $100 million.

On September 17, 64-year-old Russell Wasendorf Sr. accepted responsibility for a variety of illegal acts, including lying to regulators, embezzling funds

The former CEO of Peregrine Financial Group is still in jail after pleading guilty to defrauding investors out of roughly $100 million.

On September 17, 64-year-old Russell Wasendorf Sr. accepted responsibility for a variety of illegal acts, including lying to regulators, embezzling funds and mail fraud. Wasendorf attempted suicide this summer after learning that new financial reporting requirements would allow regulators unfettered electronic access to his hedge fund's accounts. According to The Associated Press, Wasendorf had been doctoring those accounts since the 1990s, providing his own accounting department with falsified paper documents that indicated the company had $200 million more than it actually had.

Reuters reported that Wasendorf had expected to be released from custody pending sentencing following his plea, but the judge overseeing the case decided to remand him to prison while they determine whether he is a flight risk. According to a filing from prosecutors cited by Reuters, if Wasendorf had hidden away even a small portion of the millions of dollars he admitted to stealing from clients, that could provide him with the incentive to flee prosecution.

As part of Peregrine's bankruptcy, the company will issue payments to swindled investors of up to 40 percent of the amount they had in their accounts, though it is unlikely that full restitution will ever be made, the AP reported.

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