The US Securities and Exchange Commission (SEC) charged with fraud the New York City forex trader Haena Park. According to SEC, she used a Ponzi-like scheme and raised at least $14 million from more than 30 investors since 2012. Over the same period, she lost more than $16 million from trading in forex and futures.
SEC filed a court complaint, seeking permanent injunction and the return of all ill-gotten gains, plus interest and penalties.
At the same time, the US Department of Justice brought criminal charges against Park, a founder of Phaetra Capital GP and its predecessor Argenta Capital, accusing her of wire fraud and commodities fraud.
According to Reuters, quoting the prosecution, Park actually solicited an even higher sum between 2010 and 2016 – $23 million, lost $19 million in trading and returned $3 million to investors.
Park was arrested in New York on Thursday, appeared in court and released on $150 000 bond. If found guilty, she can spend 20 years in prison on the wire fraud charge and up to 10 years on the commodities fraud charge. She also faces possible criminal and civil fines.
According to SEC, Park bragged she has profitable futures and forex trading strategies and solicited her friends, family, former Harvard classmates and people connected to them. Then she pooled investor funds and incurred heavy trading losses for months on end. Yet she was telling her investors she was profitable and was sending them false monthly statements on their “profits”.
“We allege that Park brazenly obtained investor money under false pretenses and compounded her egregious conduct by using phony monthly statements to convince some investors to significantly increase their investments based on fictitious positive returns,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.