Chicago-based futures broker and currency dealer Peregrine Financial Group (PFG) is the latest company to be charged with facilitating Trevor Cook’s $194 million Ponzi scheme, which defrauded more than 700 investors and is considered the second-largest fraud in Minnesota history.
In January, a Minnesota lawsuit filed by a receiver for the case accused Ohio-based NRP Financial of ignoring Cook’s Ponzi scheme and of failing to supervise former NRP registered representative Jason Beckman. The suit sought monetary damages from NRP. (For additional information, see our 1/9/12 post here.)In this latest lawsuit, filed Feb. 1, receiver R.J. Zayed claims PFG ignored "overwhelming red flags of fraud or insolvency" in trades executed by Cook and his associates (“Cook receiver sues broker for $48 million,” Star Tribune, Feb. 2, 2012). The suit alleges that Cook and/or his associates traded approximately $48 million through PFG over a four-year period. The lawsuit further claims that at least $30 million of the $48 million traded through PFG was subsequently lost. The suit accuses PFG of turning a blind eye to the investment scheme in order to keep Cook’s business, and of participating in the scheme by refusing to confirm the accuracy of the many misrepresentations Cook made to investors. PFG also stands accused of ignoring its own compliance policies in order to facilitate Cook’s activities. Cook is currently serving 25 years in prison for the investment scheme. For additional information about the lawsuit against PFG, read the full Star Tribune article here.