The US federal court in Iowa, hearing the enforcement action against US Bank, N.A. by the Commodity Futures Trading Commission related to the bank’s handling of customer funds for Peregrine Financial Group, denied most motions for summary judgment by both parties holding that there are sufficient disputed facts. However, the court expressly rejected US Bank’s argument that the CFTC should not be permitted to proceed with its lawsuit because the bank was prejudiced by the CFTC’s failure to follow through on its staff’s recommendations following a 1999 audit of PFG. In connection with that audit, CFTC staff identified a number of “material violations,” including an “inaccurate segregation record.” Staff also received oral responses that “appeared to be provided as an attempt to mislead the audit process.” As a result, CFTC staff recommended that a warning letter be issued and that the audit be referred to the agency’s Division of Enforcement. Neither was done apparently. However, said the court, “an affirmative defense of unclean hands is unavailable against the government in an enforcement action in the public interest.” The CFTC brought an enforcement action against US Bank in June 2013 claiming that it facilitated at least some of the misappropriation of PFG’s customer funds by Russell Wasendorf, Sr., the firm’s principal, that led to PFG’s bankruptcy in July 2012 and loss of more than US $215 million of customer funds.