- The U.S. Attorney's Office for the Southern District of New York and the U.S. Securities and Exchange Commission charged a currency trader with defrauding investors out of $23 million by misrepresenting her investment history, her use of investor funds and the profitability of her investments from her Manhattan-based hedge fund.
Haena Park, 40, allegedly touted profitable futures and foreign currency trading strategies when soliciting family, friends, former classmates at Harvard University and individuals connected to them, according to SEC filings. In turn, Park pooled investor funds and subsequently incurred heavy trading losses without alerting the investors to the actual extent of her losses. Over a seven-year period, beginning in January, 2010, Park raised more than $23 million from more than 20 individual investors, according to federal authorities, ostensibly for trading a wide range of securities including: equities, futures and foreign exchange transactions. For months, Park allegedly sent her investors monthly accounting statement that detailed fictitious profits from Phaetra Capital GP, LLC, while using new investor funds to make payments to her initial investors.
“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.
Park is also facing criminal charges in U.S. federal court for commodities and wire fraud stemming from her alleged criminal actions in the scheme to defraud her investors. Park allegedly claimed that Phaetra Capital produced annualized returns of 48.9%, when in fact her trading results were "consistently unsuccessful," according to the U.S. Department of Justice.
"It is alleged that Haena Park defrauded investors and covered up millions of dollars in financial losses with fake documents and lies that may devastate the financial security of these victims." Homeland Security Investigations (HSI) Special Agent In Charge Angel Melendez said in a statement. "HSI and its El Dorado Task Force partners are committed to investigating those who seek to exploit vulnerabilities in the US Financial System."
If convicted, Park faces a maximum sentence of 10 years in prison and a fine of $1 million on the commodities fraud charge. Park also faces a maximum sentence of 20 years in prison and a fine of $250,000 if she is convicted of the wire fraud charge.