The former chief executive of the failed brokerage firm Peregrine Financial Group, who last month wrote a note admitting that he had committed a long-ranging investment fraud, pleaded not guilty on Friday to lying to federal regulators.
Federal prosecutors charged Russell Wasendorf Sr., the former head of Peregrine, with 31 counts of deceiving regulators about the value of his customers' accounts. If convicted, he would face a maximum prison sentence of 155 years.
Last month, police in Cedar Falls, Iowa, where Peregrine was based, found Mr. Wasendorf unconscious in his car after a suicide attempt. Alongside him was a note confessing to embezzling more than $100 million from clients and defrauding the firm's banks. The authorities arrested him, and regulators discovered a customer fund shortfall at Peregrine of at least $200 million.
As the government continues to examine Peregrine's collapse, prosecutors are expected to seek additional charges against Mr. Wasendorf. Even with his earlier admission of wrongdoing, a not-guilty plea is not unusual at this stage of the case. He can try to strike a plea agreement with prosecutors by helping with the investigation, including tracking down missing customer money.
During the 10-minute arraignment proceeding in Federal District Court in Cedar Rapids, Iowa, Mr. Wasendorf stood quietly as his lawyer, Jane Kelly, entered the plea. He was dressed in orange prison garb, his hands and legs shackled, according to Bloomberg News.
Ms. Kelly did not return a telephone call seeking comment.
The charges against Mr. Wasendorf came just months after MF Global, the now-defunct futures brokerage firm, could not locate more than $1 billion in client money. Together, the two collapses highlighted regulatory holes and insufficient financial protections in the futures industry, which largely consists of money management firms that trade contracts in commodities, currencies and interest rates.
“These have been huge blows to the industry and we're looking at a variety of solutions that will better protect customer funds,†said Walter Lukken, the president of the Futures Industry Association, a trade group. Mr. Wasendorf was a prominent figure in the futures business. He served on an advisory committee at the National Futures Association, one of the industry's primary regulators. His son, Russell Wasendorf Jr., served as the president of Peregrine, which also did business as PFGBest.
The elder Mr. Wasendorf also loomed large in Cedar Falls, a town with 40,000 people. An Iowa native, he moved his business from Chicago - the epicenter of the futures markets - to Cedar Falls and spent about $18 million on its new headquarters there.
Peregrine came undone last month after the National Futures Association instituted changes to its auditing process that allowed the regulator to get information about the firm's accounts directly from its banks . The association started putting the new system into effect on the morning that Mr. Wasendorf tried to kill himself.
In his confession note, Mr. Wasendorf said he acted alone. No other Peregrine executives have been charged in the case.
