CFTC News Release 4443-00 (CFTC Docket 00-32)

For Release September 7, 2000

 CFTC FILES AND SETTLES ENFORCEMENT ACTION AGAINST PEREGRINE FINANCIAL GROUP, INC., IN CONNECTION WITH FINANCIAL VIOLATIONS

CFTC Orders Peregrine To Pay a $90,000 Civil Monetary Penalty and Comply With Various Undertakings

WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that it has issued an order instituting and simultaneously settling an administrative proceeding against Peregrine Financial Group, Inc. (Peregrine) of Chicago, Illinois. The action results from an audit by the CFTC's Division of Trading and Markets of Peregrine's financial statements as of March 26, 1999. In consenting to the order, Peregrine neither admitted nor denied the findings in the order.

Specifically, the CFTC order finds that Peregrine, a registered futures commission merchant, was undercapitalized as of March 26, 1999, in violation of section 4f(b) of the Commodity Exchange Act (CEA) and CFTC regulation 1.17(a). The order also finds that Peregrine violated CFTC regulations by: 1) failing to file timely notice with the Commission that its adjusted net capital was less than the minimum required, on March 26, 1999; 2) failing to file notice that its adjusted net capital was below the early warning threshold; 3) failing to keep accurate books and records; and 4) filing with the Commission an inaccurate capital computation and statement of financial condition on its Form 1-FR-FCM as of March 26, 1999. These violations of the CEA and the CFTC's regulations occurred primarily because Peregrine improperly classified certain receivables as "current assets," according to the order.

Peregrine consented to the entry of the order, which makes the above findings and which requires Peregrine to:

• cease and desist from further violations of the Commodity Exchange Act and Commission regulations;
• pay a civil monetary penalty of $90,000;
• comply with various undertakings which implement initiatives and changes to Peregrine's accounting practices and regulatory financial reporting;
• for a period of two years following entry of the order, to maintain its adjusted net capital at a level that is at least $800,000 above Peregrine's "early warning level"; and
• retain a certified public account to perform three reviews of Peregrine's financial statements, in accordance with certain agreed-upon procedures, and to submit a report thereon to Peregrine and the CFTC's Division of Trading and Markets.

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