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The U.S. Commodity Futures Trading Commission reviewed operations at Peregrine Financial Group Inc. at least twice since 2006 without detecting the fraud that led to the collapse of the futures broker and a $200 million shortfall in client funds, Bloomberg News reported yesterday. The Washington, D.C.-based agency conducted examinations at Peregrine in 2007 and 2008, according to a list of CFTC reviews obtained through a public records request. The list, which includes reviews between 2006 and Nov. 9, 2011, does not detail what records or procedures examiners evaluated. A third review was listed in 2011. A CFTC official said that the 2011 exam was scheduled to oversee compliance with foreign exchange regulations but did not take place because of limited resources. Gary Gensler, CFTC chairman, is scheduled to testify today at the Senate Agriculture Committee, which has jurisdiction over the agency. The CFTC sued Peregrine over the shortfall on July 10, less than a year after being scolded for poor oversight following the collapse of MF Global Holdings Ltd., which left an estimated $1.6 billion gap in customer funds.

A trade association representing some 3,700 convenience stores and other companies has hired a longtime legal foe of Visa Inc. and MasterCard Inc. to help challenge last week's $6.6 billion lawsuit settlement between the credit-card industry and merchants, the Wall Street Journal reported today. The National Association of Convenience Stores said that the pact, announced on Friday, does not address the core issue of how much control Visa, MasterCard and card-issuing banks have over the merchants who accept their cards for purchases. The Alexandria, Va.-based group hired Constantine Cannon LLP, a New York law firm that previously tangled with Visa and MasterCard over debit-card fees. The reaction of convenience stores is the most direct response to the settlement, which, aside from the monetary payment also gives merchants the right for the first time to charge customers more for using credit cards. Visa and MasterCard also agreed to an eight-month reduction in the rates that merchants pay card-issuing banks to accept credit cards, known as interchange fees. In return, Visa and MasterCard hope to close the door on the interchange-fee fight that has dragged on for years.

Polling analysts on their outlooks for a given company has become a way for large Wall Street firms to discover trading advantages from information that might not be public yet, the New York Times reported today. Questions about the selective release of analysts' views came up when the brokerage firms charged with selling Facebook's initial shares were found to have warned large buyers about some analysts' doubts regarding the company's prospects. That irked many small investors who had not received the guidance and sustained losses in their Facebook shares. The Securities and Exchange Commission is investigating these disclosures. But documents obtained by the New York Times indicate that the hedge fund practice of trawling for analysts' shifting views is systematic and growing on Wall Street. Questionnaires completed by analysts that can telegraph their thinking are being used by hedge funds run by BlackRock; Marshall Wace, a large British hedge fund company; and Two Sigma Investments, a U.S. hedge fund concern. The funds say that they ask only for public information, but in at least four cases, documents from Barclays Global Investors, now a unit of BlackRock, state the goal is to receive nonpublic information. Two documents state that the surveys allow for front-running analyst recommendations.

JPMorgan Chase & Co. said that traders appear to have hidden problems in a portfolio whose losses have ballooned to $5.8 billion, the Wall Street Journal reported on Saturday. A review of roughly 1 million e-mails and tens of thousands of voice tapes suggests traders within the once-obscure Chief Investment Office "may have been seeking to avoid showing the full amount of losses" during the first quarter by placing inaccurate prices on their positions, the bank said on Friday. The discovery, made in recent days, prompted the company to restate earnings for the first quarter and admit to a "material weakness" within a unit that manages the bank's excess cash.

Former top executives of a failed U.S. bank in Norfolk, Va., have been indicted by a federal grand jury on bank fraud and other charges for hiding loan losses in a scheme that allegedly led to the bank's demise, Reuters reported yesterday. Edward J. Woodard, former Chief Executive of Bank of the Commonwealth, was among those charged. He led the bank for more than three decades before being forced to retire in December 2010, prosecutors said. Bank of the Commonwealth, which once had $1.3 billion in assets, failed in 2011, costing the Federal Deposit Insurance Corp an estimated $268 million, prosecutors said. The indictment alleges many of the bank's loans were made without regard to industry standards, and by 2008 its losses and foreclosed properties were ballooning. Insiders then hid the bank's troubles out of fear its declining health would hurt investor and customer confidence, according to the indictment.

Futures-industry regulators missed multiple possible warning signs over the years about major problems at Peregrine Financial Group Inc., including several raised by their own investigators, the Wall Street Journal reported today. The enforcement actions filed against the brokerage by the Commodity Futures Trading Commission and National Futures Association on Monday—after its founder Russell Wasendorf Sr. attempted suicide amid $215 million in allegedly missing customer funds—follow four previous actions by regulators against the company since 1996. Previous allegations included inaccurate accounting, insufficient capital and problems with segregating customer money, documents show. The failure by regulators to detect allegedly falsified bank statements at Peregrine for at least two years has again raised questions about their ability to protect customers of futures brokerages.

U.S. localities are defaulting at the slowest rate in three years, showing that three California municipalities' decisions to file for bankruptcy protection within two weeks is not a sign of wider stress in the tax-exempt market, Bloomberg News reported yesterday. One hundred municipal issuers defaulted nationwide for the first time in the year through July 10, the least in a 12-month period since Concord, Mass.-based Municipal Market Advisers began collecting the data in 2009. The decline is counter to the "hundreds of billions of dollars" of defaults that banking analyst Meredith Whitney projected in 2010. The drop also signals that the finances of issuers in the $3.7 trillion market are improving three years after the end of the longest recession since the 1930s.

Regulators are examining JPMorgan Chase's sales tactics, after claims that the nation's largest bank pushed its own mutual funds over competitors' investments, the New York Times' DealBook blog reported today. Authorities are responding to current and former JPMorgan financial advisers who said they had felt pressure to sell the bank's products even when cheaper or better performing options were available. Regulators, including the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Manhattan district attorney and officials in New Jersey and Delaware, have opened inquiries into JPMorgan's sales practices.

Dozens of states, cities and other government entities are exploring whether they lost money because of the alleged manipulation of a crucial benchmark used to set interest rates on hundreds of trillions of dollars worth of loans and investments, the Washington Post reported today. Baltimore City is leading a federal lawsuit against the group of big banks that set Libor, the London interbank offered rate (Libor), accusing it of conspiring to suppress the benchmark. The banks named in the case include JPMorgan­ Chase, Bank of America, Barclays, Citi­Bank and Deutsche Bank. In a lawsuit filed in federal court in Manhattan, Baltimore said the banks kept Libor artificially low during the financial crisis and its immediate aftermath, robbing the city of millions of dollars in returns on investments such as interest-rate swaps.

JPMorgan Chase & Co. plans to reclaim millions of dollars in stock from executives at the center of the trading blunder that shocked Wall Street, the Wall Street Journal reported today. The nation's biggest bank is expected to claw back compensation from individuals including Ina Drew, who ran the company's Chief Investment Office. The clawback amounts were still being determined this week because of the complicated formulas and conditions for imposition. JPMorgan is expected to announce Friday that the trading blunders will cost the company just over $5 billion in the second quarter, in which the bank is expected to show a profit.