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Peregrine Financial Group's former chief executive embezzled more than $215 million from customers of his now-defunct futures brokerage, U.S. prosecutors said in court documents filed on Tuesday.
Russell Wasendorf Sr., 64, who founded the firm, has pleaded guilty to embezzlement but has claimed the loss was less than $200 million, the documents said.
Wasendorf, who is in jail in Iowa, will be sentenced on January 31. U.S. prosecutors say the amount of the loss and other factors including the large number of victims - more than 10,000 - mean he should spend the rest of his life behind bars.
"The government intends to respond at sentencing to any request by defendant for a downward variance or departure from the advisory guidelines sentence of 50 years' imprisonment," prosecutors said in the court filing.
Prosecutors put the exact loss at $215,530,547, based on a Peregrine's bank records, and will call Brenda Cuypers, the firm's chief financial officer, as a witness at the sentencing hearing next week.
Wasendorf's public defender has a policy of declining to comment on cases, and did not reply to an email from Reuters seeking comment.
The collapse last July of Peregrine Financial, known as PFGBest, dealt a blow to confidence in the U.S. futures industry, already reeling from $1.6 billion hole in customer pockets left when giant brokerage MF Global failed nine months earlier.
Futures traders had never before suffered such large losses as a result of a brokerage failure.
Regulators have scrambled to patch perceived holes in customer protections at brokerages and exchanges that handle contracts valued at some $2.5 trillion a day.
That figure is set to rise as new rules push over-the-counter swaps onto regulated trading venues.
Peregrine Financial filed for bankruptcy a day after Wasendorf tried to kill himself and confessed in a suicide note to bilking customers over nearly 20 years.
(Reporting by Ann Saphir in San Francisco, with reporting by Tom Polansek in Chicago; Editing by Gerald E. McCormick and Richard Chang)