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If we're to believe Russell Wasendorf Sr.'s suicide note, he didn't have a whole lot of fun spending the $100 million or so that he admitted to stealing from the brokerage's customers. But spend it he did.

According to The Wall Street Journal, sections of Wasendorf's suicide note that hadn't yet been released cited the need to divert customer money to pay regulatory fines and "maintain the increasing levels of Regulatory Capital." The company's founder referred to "mean spirited" regulators that he claimed were more interested in putting firms out of business than protecting customers. It was the regulators, he'd have you believe, that forced him to fraud. And it was to the regulators that much of the money went.

However, a not insubstantial portion of the money also went to build the state-of-the-art Peregrine Financial headquarters in Iowa. A 2009 article described the building as "a gleaming new $18 million glass and steel building on a 26-acre site in the Beaver Hills neighborhood of Cedar Falls." The site was "adjacent to the Beaver Hills Country Club" and it featured a fitness facility, day-care center, and a restaurant for the employees. At that point, the company had all of 100 employees.

Interestingly, other tenants of the then-newly-constructed building included other potential outlets for Wasendorf's ill-gotten capital: PFG Green Energy, W&A Publishing, SFO magazine, Peregrine Charities, offices for myVerona Ristorante Italiano, Wasendorf Construction, Wasendorf & Associates, Wasendorf & Son, and Wasendorf Air. Aside from the businesses with his name attached to them, I was able to confirm that all of the above are part of the Wasendorf-Peregrine Financial "family." A halting voice on the other end of a call to PFG Green Energy sadly noted that he'd "lost his job like everyone else."

Though Wasendorf seemed to regret the way he's conducted his business over the past couple of decades, there was no love lost on regulators. His note read: "I have to say I don't feel bad about deceiving the regulators. They made the decision to be my enemy."

What's next?
Although the money's been spent, there do seem to be a few potential avenues for the Peregrine receiver to explore in an effort to recover something for customers. However, it will likely be a long process that -- based on the amount that vulture investors have been offering for customer claims -- won't nearly make them whole.

The concern now is that the bigger cost of this latest futures-broker collapse is that investors' confidence in the system will now be (further) shot. It's a worthy concern now that two of the industry's self-regulatory organizations -- the National Futures Association with Peregrine and CME Group (NYSE: CME  ) with MF Global (OTC: MFGLQ) -- have gotten big ol' black eyes in the past year.

Much of the industry is concentrated at the top with big, global banks -- Goldman Sachs (NYSE: GS  ) , JPMorgan Chase, Newedge (a Societe Generale and Credit Agricole joint venture), Deutsche Bank (NYSE: DB  ) , and UBS (NYSE: UBS  ) -- holding more than half of the customer-segregated funds in the U.S. While the outrage will continue to be palpable, it's hard to argue that this will have a major impact on the markets. To put Peregrine in perspective, the Commodity Futures Trading Commission reported that MF Global had more than $7 billion in customer-segregated assets in August 2011. In May of this year, Peregrine (supposedly) had $371 million.

However, the failure in detecting a fraud that Wasendorf described in his letter as "relatively simple" will only increase the scrutiny on the CFTC and the self-regulatory bodies in the industry and pressure them for investor-protecting changes. And that is something long overdue.

The Motley Fool owns shares of CME Group. Motley Fool newsletter services have recommended buying shares of Goldman Sachs Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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