2012.07.10 17:45:05 PFGBest Customers' Trades Liquidated

--Customers of PFGBest saw trades held with the firm liquidated by Jefferies

--Jefferies liquidated a "substantial portion" of those positions; to
liquidate remainder in "a fair and reasonable manner"

--Jefferies doesn't expect to incur "any loss in respect of PFG"

Customers of embattled futures and currency brokerage PFGBest saw
trades held with the firm liquidated Tuesday.

All open trading positions held by clients of PFGBest were to be
liquidated by Jefferies Group Inc. (JEF), which clears transactions
for the struggling company, customers were told in a notice early
Tuesday, a copy of which was reviewed by Dow Jones Newswires.

Jefferies later confirmed that it "liquidated a substantial portion of
those positions and expects to be able to expeditiously liquidate the
remainder in a fair and reasonable manner," adding "after which all
proceeds of the liquidation will be maintained in segregated
accounts."

Jefferies said it began an orderly liquidation after PFG was unable to
meet a margin call that the investment bank made in response to an
action by the National Futures Association, the futures industry's
self-regulatory body.

Jefferies, which had trading positions held on behalf of PFG's clients
secured by cash held in margin accounts, said it doesn't expect to
incur "any loss in respect of PFG."

Shares of Jefferies moved lower following the company's confirmation
of the clearing relationship with Peregrine Financial Group Inc.,
PFGBest's parent company, falling 1% to $12.51.

PFGBest didn't immediately respond to a request for comment.

Late Monday, PFGBest's brokerage and retail customers had their
accounts frozen as regulators began looking into the company's books,
following what PFGBest described to clients as a "suicide attempt" by
founder and Chief Executive Russell Wasendorf Sr. at the company's
Cedar Falls, Iowa, offices.

In June, the company reported to the Commodity Futures Trading
Commission that it held approximately $400 million in customer assets.

Write to Jacob Bunge at jacob.bunge@dowjones.com.


(END) Dow Jones Newswires

July 10, 2012 10:55 ET (14:55 GMT)