Case: 1:12-cv Document #: 155 Filed: 12/17/12 Page 1 of 5 PageID #:1288 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS
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1 Case: 1:12-cv Document #: 155 Filed: 12/17/12 Page 1 of 5 PageID #:1288 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS U. S. COMMODITY FUTURES TRADING COMMISSION, Plaintiff, v. PEREGRINE FINANCIAL GROUP, INC., AND RUSSELL R. WASENDORF, SR. Civil Action No: 1:12-cv Judge: Rebecca R. Pallmeyer Magistrate Judge: Young B. Kim Defendants. PLAINTIFF S MOTION THAT THE CLERK OF THE COURT ENTER A DEFAULT AGAINST DEFENDANTS PEREGRINE FINANCIAL GROUP, INC. AND RUSSELL R. WASENDORF, SR. Plaintiff U.S. Commodity Futures Trading Commission ( CFTC or Commission ) respectfully requests the Clerk of the Court to enter a default against Defendants Peregrine Financial Group, Inc. ( PFG ), and Russell R. Wasendorf, Sr. ( Wasendorf ) (together Defendants ) pursuant to Rule 55(a) of the Federal Rules of Civil Procedure for their failures to plead or otherwise defend this action. In support of this motion, the Commission states as follows: 1. On July 10, 2012, the Plaintiff Commission filed a civil injunctive Complaint against PFG and Wasendorf, alleging multiple violations of the Commodity Exchange Act, as amended by the Food, Conservation, and Energy Act of 2008, Pub. L. No , Title XIII (the CFTC Reauthorization Act of 2008 ( CRA )), , 122 Stat (enacted June 18, 2008) and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
2 Case: 1:12-cv Document #: 155 Filed: 12/17/12 Page 2 of 5 PageID #:1289 Pub. L. No ( Dodd-Frank Act ), Title VII (the Wall Street Transparency and Accountability Act of 2010), , 124 Stat (enacted July 16, 2010), 7 U.S.C. 1 et seq. (2006, Supp. II 2009 and Supp. IV 2011), and the Commission s Regulations (the Regulations ) promulgated thereunder, 17 C.F.R. 1.1 et seq. (2012). The Complaint alleges violations concerning the Defendants failure to segregate customer funds, fraudulent misappropriation of such funds, and making of false statements to the Commission. 2. On July 12, 2012, the Commission properly served Defendant PFG with the Complaint and a Summons. See previously filed Executed Summons served upon PFG (Docket #24). 3. PFG s answer to the Complaint or other responsive pleading was due within 21 days, excluding the day of service. FED. R. CIV. P. 12(a)(1). Consequently, PFG s answer to the Complaint was due on or before August 2, PFG has failed to answer, plead, or otherwise respond to the Complaint. 5. On July 18, 2012, the Commission properly served Defendant Wasendorf with the Complaint and a Summons. See previously filed Executed Summons served upon Wasendorf (Docket #35). 6. Consequently, Wasendorf s answer to the Complaint or other responsive pleading was due on or before August 8, Wasendorf has failed to answer, plead, or otherwise respond to the Complaint. 8. The Federal Rules of Civil Procedure distinguish between entry of default and entry of a default judgment. Lowe v. McGraw-Hill Cos., Inc., 361 F.3d 335, 339 (7th Cir. 2004). First, the clerk of the court is directed to enter the default of a party against whom a judgment for affirmative relief is sought when that party has failed to plead or otherwise defend, and that 2
3 Case: 1:12-cv Document #: 155 Filed: 12/17/12 Page 3 of 5 PageID #:1290 failure is shown by affidavit or otherwise. FED. R. CIV. P. 55(a). After the entry of default has been entered by the clerk, the party seeking default may file a motion requesting a default judgment. FED. R. CIV. P. 55(b); UMG Recordings, Inc. v. Stewart, 461 F. Supp. 2d 837, 840 (S.D. Ill. 2006). 9. In connection with any subsequent motion for a default judgment in which the Commission seeks that PFG be ordered to pay a civil monetary penalty, the Commission acknowledges that any order for payment of a civil monetary penalty by PFG entered by the Court shall constitute a fine or penalty under 11 U.S.C. 726(a)(4) (Supp. IV 2011) and intends that any claim based upon such civil monetary penalty that it may file in the bankruptcy case In re Peregrine Financial Group, Inc., No (Bkrtcy. N.D. Ill., filed July 10, 2012), be fully subrogated to any and all claims by PFG customers in that case. 10. Because both Defendants have failed to plead or otherwise defend this action, entry of a default against them is warranted pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. 3
4 Case: 1:12-cv Document #: 155 Filed: 12/17/12 Page 4 of 5 PageID #:1291 WHEREFORE, the Commission respectfully requests that the Clerk of the Court enter a default against Defendants PFG and Wasendorf. Dated: December 17, 2012 Respectfully submitted, /s/ William P. Janulis Chief Trial Attorney Illinois A.R.D.C. No Commodity Futures Trading Commission 525 West Monroe Street, Suite 1100 Chicago, Illinois (312) wjanulis@cftc.gov Jon J. Kramer Senior Trial Attorney Illinois A.R.D.C. No Commodity Futures Trading Commission 525 West Monroe Street, Suite 1100 Chicago, Illinois (312) jkramer@cftc.gov 4
5 Case: 1:12-cv Document #: 155 Filed: 12/17/12 Page 5 of 5 PageID #:1292 CERTIFICATE OF SERVICE I hereby certify that on December 17, 2012, I electronically filed this Motion with the Clerk of the Court using the CM/ECF system and caused it to be served by U.S. Postal Service Mail and via on the following parties who are not CM/ECF participants. Russell Wasendorf, Sr., Defendant c/o Jane Kelly Assistant Federal Defender 320 Third Street SE Suite 200 Cedar Rapids, IA through carrie.maas@fd.org Peregrine Financial Group, Inc., Defendant c/o Rebecca J. Wing General Counsel and Registered Agent 311 W Monroe St. Suite 1300 Chicago, IL rwing@pfgbest.com /s/ William P. Janulis One of the Attorneys for Plaintiff Commodity Futures Trading Commission 5
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