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Peregrine Judge Grants Trustee Request to Subpoena Banks

Peregrine Financial Group Inc.’s bankruptcy trustee obtained court approval to issue information subpoenas to JPMorgan Chase & Co. (JPM), Goldman Sachs & Co. and eight other financial firms.

U.S. Bankruptcy Judge Carol A. Doyle granted Trustee Ira Bodenstein’s request after hearing arguments at the federal courthouse in Chicago.

Bodenstein’s lawyer, Robert Fishman, told Doyle those financial firms were the “principal institutions” with which Peregrine and its subsidiaries did business.

The commodities broker filed for Chapter 7 liquidation on July 10, hours after the U.S. Commodity Futures Trading Commission sued the Cedar Falls, Iowa-based firm and founder Russell Wasendorf Sr., alleging they had misappropriated more than $200 million in client money.

A day earlier, the National Futures Association -- an industry self regulator -- had announced the firm had about $5 million on deposit at U.S. Bank NA, when it had reported $225 million on June 29.

Peregrine has more than $500 million in assets and more than $100 million in liabilities according to its bankruptcy petition.

The trustee is seeking details from that US Bancorp (USB) unit as well as JPMorgan Chase, Goldman Sachs and the other institutions, including documents relating to Peregrine’s open and closed accounts, wire transfer details, canceled checks and correspondence.

While a JPMorgan attorney raised objections to service of that document upon bank Chairman Jamie Dimon, Fishman told Doyle the parties had agreed that delivery of the subpoena to a bank lawyer would suffice.

Outside the courtroom, Fishman said there was no plan to seek testimony from Dimon.

The bankruptcy case is Peregrine Financial Group Inc., 12-27488, U.S. Bankruptcy Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at

To contact the editor responsible for this story: Michael Hytha at

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