With the rate at which horrifying examples of widespread moral bankruptcy and fraudulent misdeeds are coming to light in the financial industry today, one can scarcely afford a moment's rest for fear of missing the dastardly disgrace du jour.

Already this week, even as investors continue to wrap their heads around the monumental LIBOR rate-rigging debacle, the dramatic implosion of futures brokerage PFGBest amid a reported shortfall in customer-segregated accounts has shattered hopeful notions that the MF Global disaster would remain an isolated event.

According to a suit filed by the Commodity Futures Trading Commission (CFTC) on Monday, the customer accounts of PFGBest parent company Peregrine Financial Group face an apparent shortfall of at least $200 million, and there is now evidence that shortfalls of a similar scale have persisted since at least February 2010. Reuters reports that PFG's sole-owner and chairman, Russel Wasendorf Sr., may have "intercepted and forged bank documents for more than two years to cover up hundreds of millions of dollars in missing money."

After discovering the shortfall Monday, the National Futures Association took immediate enforcement action by freezing PFGBest's brokerage accounts. In addition to the CFTC, the FBI confirmed it is also involved in the ongoing investigation. PFG filed for Chapter 7 bankruptcy protection Tuesday, and clearing services provider Jefferies Group (NYSE: JEF) began liquidating all open trading positions held by PFG clients.

Cruelly, some of the same futures traders that were victims of the MF Global collapse have now been denied access to their funds for the second time in less than a year. The bankruptcy trustee in the MF Global case transferred some of those client accounts to PFGBest, leading some traders on a second involuntary journey through financial hell.

Russel Wasendorf Sr. is decidedly unavailable for comment
In an excessively dramatic subplot to a story that didn't need one, Wasendorf is currently comatose and listed in critical condition at an Iowa City hospital following a failed suicide attempt. According to the Huffington Post, he was found in his car Monday at PFG headquarters in Cedar Falls, Iowa, "with a tube connecting its tailpipe to the interior." Bloomberg reviewed a police report revealing that a suicide note "was found in the vehicle that indicated possible discrepancies with accounts at Peregrine Financial Group".

In the combined wake of Wasendorf's apparently routine submission of forged bank documents to regulators, and his attempted suicide, the prominent heading beneath his photograph within PFGBest's corporate brochure reads with a bone-chilling irony: "To succeed you must first survive."

But the bitter irony does not stop there. Wasendorf himself lost some money when futures broker Sentinel Management Group declared bankruptcy back in 2007, and his reported reaction at the time was: "It's disbelief that someone could get away with this kind of shell accounting." Today, of course, his outraged clients are experiencing that sense of disbelief firsthand.

And tipping the irony meter into the red zone, PFGBest's own website contains an entire page dedicated to awards that the futures commission merchant (FCM) has received over the years. For 13 years straight, Futures magazine named PFG among the top 50 U.S. futures brokerages based upon CFTC data for customer assets on deposit. If only the CFTC had bothered to call PFG's bank directly when the regulator performed a joint review with the National Futures Association of the 70 largest FCMs in January and found "no material breaches of customer funds protection requirements." Believe it or not, in June 2011, PFG received an award called the Iowa Character Award, honoring those that "consistently demonstrate and promote the six pillars of character: trustworthiness, respect, responsibility, fairness, caring, and citizenship." I wonder whether we'll see a claw back to have that plaque returned.

We the many victims of fraud
Of course, the primary victims of these unfortunate events are those with capital invested either directly with PFG or through another broker who sent trades through PFG on their behalf. As with the MF Global case, there can be no ascertaining the timing of when some portion of customer funds may be released, or indeed whether they may somehow see their capital returned in full. But the complete list of victims here stretches clear to the horizon. PFG employees, minus any individuals who may have been aware of Wasendorf's fraud, are obviously victims here as well.

Also among those affected by PFG's sudden collapse are the separate victims of a $194 million Ponzi scheme operated by one Trevor Cook. PFGBest served as a broker for some of Cook's own nefarious dealings, and a lawsuit filed by the court-appointed receiver in that case sought to recover $48 million from PFG, alleging that PFG permitted Cook to maintain accounts "in the face of overwhelming red flags of fraud or insolvency." With PFG in bankruptcy, any hope for those folks to see a return of their capital grows increasingly dim.

If you have investment exposure to commodities, you may find yourself affected by the mass liquidation of commodity futures contracts. I saw it clearly in the aftermath of MF Global, and although PFG is smaller in scale, futures prices can indeed be affected by such a sudden liquidation, much the way an increased margin requirement might force liquidation of speculative positions with an observable impact on prices. In the midst of an extremely challenging year for commodity investors, in which major metal miners BHP Billiton (NYSE: BHP) and Barrick Gold (NYSE: ABX) are trading near 52-week lows, any such impact will feel like lime juice squeezed onto a paper cut.

Ultimately, every single investor is a victim of this latest example of the rampant misconduct and outright fraud that seems to have infected our entire financial system like a plague. The list has grown far too long, and it may have reached a critical mass to begin scaring investors straight out of the markets. The unsettling macroeconomic outlook and the structural shortcomings like those exposed by the 2010 flash crash are sufficient obstacles for retail investors to contend with. With the addition of Madoff, LIBOR-gate, the muni-bond-rigging cartel, MF Global, Lehman, gold-price suppression, and the long list of hugely disappointing scandals in recent years, it's a wonder any of us are still sticking around.

But stick around I will, and I suspect many of you will likewise remain engaged in the enduring practice of buying stocks for profit. I am a stock investor, and I will not be scared out of my long-term strategy for investment success by the likes of Russel Wasendorf or Jon Corzine. I will hold fast to my positions in Teck Resources (NYSE: TCK) and First Majestic Silver (NYSE: AG) even when commodity markets face widespread manipulation and sudden mass liquidations. I will continue to highlight deep value resource stocks as I see them, and leave the leveraged play in futures markets to speculators with a far higher risk tolerance than my own. After all, and I mean this with no disrespect to the clients of PFG, "to succeed you must first survive."