Last week, the National Futures Association (NFA) received information that Peregrine Financial Group had falsified bank records.
It found the company could only account for $5 million of the $225 million it claimed to have in a deposit account. After which, all accounts were frozen and the association barred Peregrine from trading.
Following an expedited hearing held today, an IIROC hearing panel ordered the following:
- Peregrine’s Membership is, on consent, immediately suspended;
- Peregrine is directed to immediately cease dealing with the public as a dealer Member, including removing any websites from public access;
- Peregrine is authorized and entitled, but not obligated, to pay its reasonable operating expenses including without limitation severance payments, wages for Peregrine staff, lease payments, legal costs and storage costs after providing IIROC’s vice president, financial and operations compliance with prior written notice of such payments.
- Peregrine is restricted from undertaking any of the following activities without first obtaining the written consent of IIROC’s VP Operations:
- reducing its capital in any manner including redemption, repurchase or cancellation of any of its shares;
- reducing or repaying any indebtedness which has been subordinated with the approval of IIROC;
- directly or indirectly making any payments by way of loan, advance, bonus, dividend, repayment of capital or other distribution of assets to any director, officer, partner, shareholder, related company or affiliate; and
- increasing non-allowable assets, unless a prior binding commitment to do so exists, or entering into any new commitments which would have the effect of materially increasing the non-allowable assets of the firm;
- Peregrine shall work with IIROC staff to plan and affect steps for an orderly wind-down, through liquidation or other similar process acceptable to IIROC staff. Steps shall be initiated in a manner satisfactory to IIROC staff no later than August 20, 2012, failing which IIROC staff may appear before a hearing panel for further orders and direction;
- Peregrine shall preserve all books and records, including all hard copy and electronic records in Peregrine’s possession or control (including any computer servers, hard drives and any other electronically stored records in any form) for a period of nine months or pending further order of a hearing panel, which records shall be made available to IIROC staff on demand within a reasonable timeframe;
- Peregrine shall maintain the Records at its office premises at 1290 Central Parkway West, Suite 200, Mississauga, Ontario, and shall pay any and all costs required for the purpose of that maintenance, for the period set out in paragraph 6 hereof, and the Records shall not be moved or altered without notice and approval of IIROC staff;
- And upon IIROC staff’s satisfaction that necessary wind-up steps have been effected, IIROC staff may move without notice to Peregrine for an order terminating Peregrine’s Membership.
The order is effective immediately.
Read the hearing panel’s order.