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Forex Dealer Sued For Allegedly Ignoring Red Flags Of Fraud

Posted in Asset Search/Fraud Investigation, Money Laundering, Securities Fraud

A February 3rd civil complaint filed against Forex dealer Peregrine Financial Group, (“PFG”), alleges “PFG ignored or failed to discern a myriad of objective red flags of fraud…” Complaint at pp. 5-6 ¶12.  The complaint asserted a $48 million dollar claim under Minnesota’s fraudulent conveyance law and it was filed by Receiver R.J. Zayed, who is trying to collect assets dissipated by Ponzi schemer Trevor Cook.

Describing the complaint, a StarTribune.com article explained that Trevor Cook admitted to defrauding more than 700 investors out of $194 million.  According to p. 35 ¶102 of the complaint, PFG participated in fraud with Ponzi schemer Trevor Cook.  Page 13 ¶33 of the complaint alleged that Cook opened, (or caused to be opened), at least 26 trading accounts at PFG.  The complaint also stated at page 31 ¶90, “PFG permitted itself to be used to funnel funds” and that Cook had supposedly used PFG to wash funds through a commission account.

In certain respects Receiver Zayed’s complaint against PFG, resembles Madoff Trustee Irving Picard’s December 5, 2010 amended complaint suing HSBC.  Similar to Receiver Zayed’s complaint, Trustee Picard’s amended complaint asserted at p.155 ¶550 & p.157 ¶ 557, that some defendants ignored “myriad red flags“.  The first paragraph of the amended complaint claimed that Madoff monies “were funneled by and through the HSBC defendants” and also alleged that these defendants “aided, enabled and sustained the massive Ponzi scheme masterminded by Madoff…

As mentioned by “Using Red Flags To Recover Ponzi Proceeds“, Trustee Picard’s amended complaint was filed pursuant to New York’s fraudulent conveyance law, bankruptcy law, securities law and the common law.  The Court’s July 28, 2011 decision ultimately determined that Trustee Picard lacked standing to bring common law claims and dismissed the same.  An article discussing this dismissal is Madoff Trustee’s Job Just Became Much Tougher.

 

Copyright 2012 Fred L. Abrams