U.S. Bank is willing to pay $44.5 million to settle a class-action lawsuit by customers of Peregrine Financial Group, which collapsed in 2012 after funds were siphoned away by the brokerage’s founder, said Reuters. The proposed settlement was disclosed in a court filing. It would resolve the lawsuit, which accuses the bank of failing to carry out its fiduciary duties. Peregrine’s founder pleaded guilty to embezzling more than $215 million in customer funds.
Peregrine failed just months after a larger trading house, MF Global, collapsed. Congress and federal regulators have taken steps to better protect client funds from misuse. On June 9, the House passed a bill, HR 2289, to reauthorize the Commodities Futures Trading Commission that includes additional safeguards. The Senate has yet to act.