Lawsuit: PFGBest didn’t give notice of layoffs
SUN-TIMES MEDIA WIRE July 12, 2012 2:46PM
Updated: August 14, 2012 6:28AM
A man who was one of about 100 employees laid off when Chicago futures brokerage PFGBest filed for bankruptcy this week has filed a lawsuit claiming employees did not receive the required 60-day notice of a mass layoff.
The Chapter 7 bankruptcy filing Tuesday night by Peregrine Financial Group Inc. came on the heels of an announcement that the federal Commodity Futures Trading Commission is accusing Peregrine Financial and its founder, Russell Wasendorf Sr., of fraud.
Regulators shut down the futures brokerage and leveled charges that more than $200 million in customer funds are missing.
While PFGBest is based in Iowa, about half its 200 employees worked in Chicago at 311 W. Monroe, a spokeswoman has said. She said Wednesday all are now out of work.
But one of those employees, Ronald Kotulak, in a federal lawsuit filed Tuesday, claims employees were not given adequate notice of the company shutting down. He is seeking class-action status for his suit, which seeks 60 days of wages and benefits for himself and other former employees.
The suit says the employees were laid off July 9, the same day the company filed for bankruptcy, and were not given the 60 days notice required by the federal Worker Adjustment and Retraining Notification Act.
Wasendorf remains in a hospital in Iowa City, Iowa, after what his company and police say was an attempted suicide Monday morning. Investigators said a note was found indicating accounting trouble at the firm. Wasendorf, 64, was found unconscious in a car parked outside company headquarters in Cedar Falls, Iowa.
Trouble had been brewing at the company for some time. In February, the NFA fined PFGBest $700,000 for failing to supervise certain brokers. And the firm was accused of profiting from a Ponzi scheme run out of Minnesota by Trevor Cook. A receiver for Cook’s victims filed suit against Peregrine, seeking $48 million for allegedly facilitating fraud.