Wednesday Afternoon News, November 19
Brokerage Collapse Lawsuit
IOWA CITY, Iowa (AP) - A judge is ordering a trial to determine whether U.S. Bank broke the law in its handling of customer funds of a brokerage that collapsed after a 20-year fraud scheme.
U.S. District Judge Linda Reade ruled Wednesday that jurors will decide federal regulators' claims related to the bank's relationship with now-defunct Peregrine Financial Group.
The founder of the Cedar Falls-based brokerage, Russell Wasendorf, is in prison after admitting to a $215 million fraud. Regulators are seeking $36 million in restitution from the bank.
The U.S. Commodity Futures Trading Commission contends U.S. Bank violated rules that require financial institutions to segregate customer accounts.
The agency contends U.S. Bank accepted customer funds as security on loans it made to Wasendorf, and allowed him to transfer customer funds to pay other expenses.
Pharmacy Board Tables Vote On Marijuana
DES MOINES, Iowa (AP) - The Iowa Board of Pharmacy will wait until a January meeting to consider recommending changing state law to reclassify marijuana so it could be used to treat medical conditions.
The board met Wednesday and decided to table a proposal that members recommend a change to the current law.
Currently, marijuana is classified under state law as both a Schedule I drug, meaning it is has no medical use, and as a Schedule II drug, which has medicinal value. Advocates want the drug to be placed only in the Schedule II category.
The board recommended that the Legislature make such a change to state law in 2010, but no action was taken.
Lawmakers this year approved legislation that allows the use of oil derived from marijuana to treat chronic epilepsy.
Car Hits Boy
COUNCIL BLUFFS, Iowa (AP) - A 9-year-old boy has suffered minor injuries after being hit by a car in Council Bluffs.
Council Bluffs Police Department Sgt. Jason Bailey says Joshua McNutt was hit Wednesday morning at an intersection. Witnesses told police the boy was walking the intersection while a signal instructed him not to cross.
Bailey says Joshua was hit at a low speed and had minor injuries to his knees from falling. He was taken to a local hospital as a precaution.
The driver of the car will not be charged.
Investigation Into School Hazing Incident
GREENFIELD, Iowa (AP) - School officials have issued an apology to victims of a 2011 hazing incident at a Greenfield high school.
The apology came as part of a settlement Tuesday from the incident in the high school's wrestling room.
Two students were originally charged with second-degree sexual abuse, but the charges were reduced to first-degree harassment. According to online court documents, the students pleaded guilty to the harassment charges.
The apology by Nodaway Valley Community School District was issued by superintendent Casey Berlau. He said in the statement that the district wants to apologize to the victims and their families for the assault that occurred while they were in the wrestling program.
Berlau said the district is making efforts to ensure another incident will not occur.