The Senate Agriculture Committee hearing is going on right now- tune in to watch. But while we wait for Congress to grill the regulators, a story from the Wall Street Journal has us seeing red:

Further details of the email emerged in an NFA response to a letter sent last week by Sen. Tom Harkin (D., Iowa) seeking information about how the regulator operates, as well as additional information about the May email.

The NFA in its response, reviewed by The Wall Street Journal, said that on May 13, 2011, at 2:08 p.m. Central time, an NFA auditor was copied on an email purportedly from US Bank employee Hope Timmerman to Susan O’Meara, Peregrine’s chief compliance officer.

Attached to the email was a document that showed that Peregrine’s customer account at US Bank contained a balance of $7,181,336.36, according to the NFA response.

The following Monday, May 16, 2011, the NFA says it received a two-page fax delivered via email that provided a “corrected copy” of the Peregrine account’s balance. The first page was purportedly on US Bank letterhead and contained a post office box number that had been included in the original May 13 email. It said the document came from Ms. Timmerman and provided a fax number for Ms. Timmerman.The NFA in its response didn’t directly address a question from Mr. Harkin’s staff about “why the NFA failed to pursue this more fully.” At the time of the May 2011 exchange, the NFA “was in the middle of conducting on-site audit fieldwork of PFG,” its response says. A spokesman for the NFA declined to comment.

“The hand-written balance included in this confirmation was $218,650,550.96, which agreed to the balance of the purported bank statement provided by the firm to NFA as of March 31, 2011,” the NFA response to Mr. Harkin states.

An Internet search on Tuesday for the phone number turned up results that assigned it to a Russell Wasendorf, with an address listed for Mr. Wasendorf Sr.

Let us make this as clear as humanly possible.

The NFA was explicitly informed by U.S. Bank of the account shortfall at PFGBest last year, and accepted a fax with a handwritten account balance as proof positive of adequate funds- a fax which a basic internet search reveals came from a number assigned to Russ Wasendorf, Sr.

There are just no words that can adequately respond to this. None. If you haven’t signed our petition calling for a full investigation of the NFA, the time is now.