CHICAGO (CBS) — Experts say there should have been a red flag ahead of this week’s collapse of brokerage firm PFGBest, a company with $500 million in assets using a suburban home-based accountant to keep its books.
As WBBM Newsradio’s Regine Schlesinger reports, until founder Russell Wasendorf Sr. tried to commit suicide and the company filed for Chapter 7 bankruptcy this week, PFGBest was a major player in the futures industry.
LISTEN: WBBM Newsradio’s Regine Schlesinger reports
So why was it using a sole practitioner working out of her Glendale Heights home for all of its accounting?
The accountant, Jeannie Veraja-Snelling of Glendale Heights, was distraught as she told Reuters she cannot talk about the situation, and the company cannot say anything either.
While there is no indication that Veraja-Snelling did anything wrong, critics say the PFGBest affair has echoes of the Bernie Madoff scandal. Madoff used an auditor based in a strip mall in the New York City suburbs, Reuters reminds us.
Experts say the sole accountant working from home should have tipped off regulators that perhaps everything wasn’t right with finances at PFGBest.
A former Securities and Exchange Commission accountant tells Reuters that typically, accountants want people to have confidence in their numbers, and feel like they have a big name behind them.
PFGBest and Wasendorf were accused by on Tuesday by the U.S. Commodity Futures Trading Commission of misappropriating about $2500 million in customers’ money in a fraud scheme and lying to cover it up.
Wasendorf had attempted suicide the morning before outside the firm’s officesin Cedar Falls, Iowa, Reuters reported.