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CORRECTED-Gensler-Peregrine's auditors should have confirmed bank balances
July 25, 2012 / 3:58 PM / in 5 years

CORRECTED-Gensler-Peregrine's auditors should have confirmed bank balances

(Corrects to reflect that Gensler did not specifically call PwC an outside auditor)

WASHINGTON, July 25 (Reuters) - U.S. Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers on Wednesday that Peregrine Financial Group’s outside auditors should have confirmed the now failed brokerage’s bank balances.

Peregrine’s founder Russell Wasendorf Sr., who was arrested earlier this month, has admitted to forging bank statements and fooling regulators for nearly two decades.

PricewaterhouseCoopers was previously retained to review certain Peregrine financial accounts more than a decade ago as a condition of a settlement Peregrine struck with the CFTC. The CFTC fined the brokerage and ordered it to get a second independent opinion of its books.

It is not clear if PwC was technically an outside auditor for Peregrine, but Gensler spoke about the obligations of outside auditors when asked about PwC.

“The yearly certified public accountant has to use generally accepted auditing standards, and as I understand it, those auditing standards do require ... the confirmation of assets,” Gensler told lawmakers at a House Agriculture Committee hearing. (Reporting By Sarah N. Lynch; Editing by Gerald E. McCormick and Tim Dobbyn)

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