Lawsuit in Iowa brokerage scandal 'without merit,' US Bank says

US Bank is rejecting allegations in a lawsuit that claims one of its employees helped Peregrine Financial Group CEO Russ Wasendorf Sr. mislead regulators about his misuse of customer funds.

US Bank Senior Vice President Tom Joyce said Tuesday the lawsuit filed by Peregrine President Russ Wasendorf Jr. is "entirely without merit" and that no bank employee committed misconduct.

He says the lawsuit is an attempt by the Wasendorfs to deflect blame for the $200 million fraud scheme to which Wasendorf Sr. pleaded guilty Monday.

The lawsuit claims a bank employee told auditors in May 2011 that Peregrine had $7 million in a customer account. Days later, the suit says someone claiming to be that employee informed auditors the earlier amount was wrong and the account actually had $221 million.