OT: Now here's a surprise....
posted on
Aug 14, 2012 03:54AM
Projects in Central British Columbia
Will a banker finally go to jail? Stay tuned. All the best.
More from the WSJ:
Mr. Wasendorf was arrested July 13 on charges of lying to regulators following a suicide attempt on July 9 that included a confession that authorities say detailed a nearly 20-year fraud against Peregrine's customers. Regulators have estimated that about $215 million in customer money is missing.
Peregrine, which did business as PFGBest, filed for bankruptcy July 10.
No date has yet been set for Mr. Wasendorf to be arraigned on the charges, according to a statement from the U.S. Attorney's Office.
A grand jury in Cedar Rapids, Iowa, on Peregrine took just one day to hear testimony and hand up the indictment against Mr. Wasendorf.
Is it good that Wasendorf is going away, most likely for the rest of his life? Of course- the man is a sociopathic criminal. But the problem is that the incentives, the controls, and the "processes" that PFG engaged in to cheat thousands of clients out of their life savings are pervasive throughout the US financial system. It is this, and not an individual appeals court case which incidentally has no impact on a completely standalone bankruptcy process and whose outcome can be appealed under any other jurisdiction, that US investors, or what's left of them, should be worried about. Because it is the fundamental flaws in the US financial system which virtually assure that all capital currently residing with US banks as financial intermediaries will, sooner or later, in the parlance of MF Global, vaporize.
Sadly, and just like in the stock market, the cognitive bias that "it can't happen to me" and that "I can always get out first" is dominant here as well. And will be, until both of these delusions are found to be 100% just that.