Peregrine Financial Group Inc.'s 401(k) plan is under investigation by the Department of Labor, Ira Bodenstein, trustee appointed to oversee the firm's Chapter 7 bankruptcy case, revealed in written testimony Wednesday before the Senate Committee on Agriculture, Nutrition and Forestry.
“I am also working diligently to address employee issues, including those related to an investigation that has been initiated by the Department of Labor into Peregrine's employee 401(k) plan,” Mr. Bodenstein wrote in outlining his work on the Peregrine bankruptcy case.
Jason Surbey, Labor Department spokesman, said, “We choose not to confirm or deny investigations.”
In an interview, Mr. Bodenstein said a Labor Department attorney asked for his cooperation in its investigation of the 401(k) plan. Mr. Bodenstein instructed Peregrine staff to cooperate, he said.
“They are looking to see what's there … they didn't specify” what the DOL investigators are seeking, he said in the interview. “I have no information,” whether the Labor Department suspects wrongdoing in the 401(k) plan, Mr. Bodenstein said in the interview.
“I will be looking into that” 401(k) plan as part of his work at trustee, he said in the interview.
Information on the size of the 401(k) and its investment managers and portfolio options wasn't available by press time.
Peregrine filed for bankruptcy protection July 10 in U.S. Bankruptcy Court in Chicago, the same day the Commodity Futures Trading Commission filed a lawsuit in U.S. District Court, Chicago, alleging Peregrine and Russell Wasendorf Sr., CEO and founder, misappropriated $214.9 million in missing customer funds and committed fraud, among other violations.
Mr. Wasendorf attempted suicide July 9 and was in a coma as a result, according to the CFTC complaint.
Mr. Bodenstein is a member of the Shaw Gussis Fishman Glantz Wolfson & Towbin LLC law firm.