CFTC Permanently Bars Peregrine Accountant (with Lofchie Comment)

The CFTC filed and settled charges against a certified public accountant for failing to audit a financial group in accordance with CFTC Regulation 1.16 ("Qualifications and Reports of Accountants").Jeannie Veraja-Snelling was the auditor for Peregrine, an FCM whose CEO, Russell Wasendorf, was convicted of fraud in July 2012 in connection with a shortfall of approximately $200 million.

The CFTC alleges that Wasendorf was able to commit and conceal his fraud because Peregrine lacked proper accounting controls. Furthermore, the CFTC found that Veraja-Snelling's audits of Peregrine were not performed in accordance with generally accepted auditing standards due to the lack of necessary technical expertise needed to audit a FCM. The CFTC barred Veraja-Snelling from appearing or practicing as an accountant before the Commission and required her to relinquish the right to receive payment for performing the 2011 audit.

Lofchie Comment: The disciplinary action in this case provides useful instruction as to the compliance requirements of CFTC Regulation 1.16 and for an auditor to have enough competence to perform a legally sufficient audit of an FCM.

See: CFTC Order; CFTC Press Release.