Congressman Bruce Braley says a U.S. House committee should investigate the federal agency that failed to detect the fraud scheme perpetrated by a Cedar Falls man.
Sixty-four-year-old Russell Wasendorf, Senior, admitted in a written statement that he had defrauded investors for 20 years, by drawing up fake bank statements. Wasendorf tried to kill himself July 9 and left that written statement along with a suicide note. The contents of both documents were released by court officials last week. Wasendorf was charged last Friday with making false statements to federal regulators.
Congressman Braley is asking the Oversight and Government Reform Committee in the U.S. House to investigate why the Commodities Futures Trading Commission was “so easily” fooled by Wasendorf. Peregrine Financial Group, based in Cedar Falls, filed for bankruptcy last week. Investigators say they don’t know whether more than 1800 investors will ever see their money again.
Last week Iowa Senator Chuck Grassley asked leaders of the U.S. Senate’s Ag Committee to address the scandal as that panel holds a hearing August 1st on the collapse of another brokerage. Grassley also wrote a letter to the chairman of the Commodity Futures Trading Commission, asking why the agency failed to see the “red flags” about Wasendorf’s firm.