WASHINGTON — The demise of an Iowa brokerage where the founder tried to kill himself hurts investor confidence and could damage the markets for options and futures, investments that keep food and energy prices in check.

Without stronger oversight of those markets, investors will flee, leaving them too thin and brittle for companies to hedge against swinging commodity prices, experts and investors said Wednesday.

Peregrine Financial Group declared bankruptcy Tuesday and hasn't accounted for $215 million of customer money. Authorities said founder Russell Wasendorf Sr. tried to commit suicide by running a hose from the tailpipe of his car to the inside.

Peregrine handles only a tiny slice of the market for futures and options. But its implosion addles traders already worn down by months of scandals, missteps and revelations of fraud, said Michael Greenberger, a former senior official at the Commodity Futures Trading Commission, which regulates the industry.

"These markets have lost the confidence of their customers, from the small businesses that need to use them to hedge, to the large funds who use them to invest," said Greenberger, a professor at the University of Maryland School of Law.

If the markets don't receive a strong, immediate boost of confidence, he said, "everyone is going to be hurt, because hedging — if it's done properly — helps consumers by creating lower prices. If not, prices are going to go up."

Futures and options allow companies to lock in prices for commodities, so an airline buying fuel or a farmer buying fertilizer can predict what those things will cost. Knowing in advance saves businesses money and reduces prices for consumers.

When fewer investors participate in a market, it becomes more difficult to buy and sell investments quickly at the price traders want. People end up paying more than they otherwise might, and small changes in demand jerk prices up and down.

Futures and options were specialties of Peregrine, which filed for Chapter 7 bankruptcy liquidation in Chicago late Tuesday.