On January 26, 2017, Richard Standish and Charles Sizemore (“Plaintiffs”) filed a class action complaint (the “Complaint”) on behalf of themselves and all persons and entities who held futures accounts with the Debtor as of the Petition Date (the “Class Members”), commencing a new adversary proceeding captioned Standish, et al. v. Bodenstein (Adv. No. 17-00041).
In their Complaint, Plaintiffs assert four claims: Count I alleges that PFG breached fiduciary duties to the Class Members by misrepresenting the manner in futures deposits would be accepted and handled and failing to disclose the embezzlement of customer funds by PFG’s CEO, Russell Wasendorf, Sr. Count II alleges that PFG’s failure to disclose Wasendorf’s theft of customer funds to Class Members was common law fraud, and Count III asserts that PFG was unjustly enriched by accepting Class Member funds for futures trading while failing to disclose Wasendorf’s misconduct. In Count IV, Plaintiffs claim that the Trustee’s “refusal” to return funds deposited by Class Members for futures trading constitutes conversion. The Complaint demands that the Bankruptcy Court certify the case as a class action, impose a constructive trust on all funds held in the Class Members’ futures accounts, and award monetary damages, punitive damages and attorney’s fees to counsel for the Class Members.
An initial status hearing on the Complaint is scheduled for Wednesday, March 8, 2017 at 10:30 a.m. (CST) in Courtroom 742, U.S. Courthouse, 219 South Dearborn Street, Chicago, Illinois, before the Honorable Carol A. Doyle, Bankruptcy Judge, or such other judge who may be sitting in her place and stead. This hearing may be continued from time to time without further notice other than an announcement in open Court. A copy of the Complaint is available here.