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October 1, 2023

The First Sign of Trouble at PFGBest Might Have Been The Fact That Their Auditor Worked Out of a Living Room

When shopping around for an auditor, a strong, completely legit company might look for such things as prestige or number of years serving capital markets without going all Arthur Andersen on 'em but for belly-up brokerage firm PFGBest, it looks like some chick's house in the Chicago 'burbs was the perfect sort of office space for their auditor to operate out of.

Reuters has the exclusive:

U.S. futures industry investigators are looking into why Iowa-based collapsed brokerage PFGBest used a tiny accounting firm that appears to be operating from inside a suburban Chicago home to audit its books, according to a person familiar with the matter.

Experts said the use of such an auditor should have been a red flag to regulators of a futures brokerage with more than $500 million in assets and several hundred employees across the United States as well as in Shanghai and Canada.

Reuters goes on to remind everyone that Bernie Madoff's "auditor" worked out of a strip mall and Allen Stanford's "auditor" was a strange but aptly-named unknown who conveniently died on January 1 of the year Allen got found out and worked out of a shack in Antigua.

So, while the KPMGs of the world are busy being the brunt of jokes on GC despite having real clients, PFGBest's Veraja-Snelling Company and its one-woman superstar auditor Jeannie Veraja-Snelling boast a total of ZERO public company audits in their latest PCAOB filing. Yup, zero. Jesus, even McGladrey has some real public company audits.

The worst part of the whole story is that not only does Jeannie seem to have a really bad memory, she also has some questionable taste in clothes according to Reuters:

On Tuesday night, she came to the door wearing a green sleeveless shirt and blue denim shorts. A stack of cardboard filing boxes was sitting just inside the door.

JORTS, people. This is disturbing and should have sent a team of SEC Fashion Police scrambling to shut this woman down immediately. Surely there's some Dodd-Frank reg that forbids that kind of egregious error.

When reached at her Glendale Heights home on Tuesday night, Jeannie Veraja-Snelling, who listed herself an officer of the firm when she registered with the Public Company Accounting Oversight Board in February 2010, said she could not talk about PFGBest.

"I don't know what's going on. I just found about it all an hour ago so I can't talk about it," said Veraja-Snelling, appearing distraught.

Sure you don't, Jeannie, sure you don't.

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