The Securities and Exchange Commission today charged a New York City-based trader with defrauding investors out of millions of dollars by misrepresenting her investment track record, the profitability of her investments, and her use of investor funds.
The SEC alleges that Haena Park and her firm – referred to as “Phaetra” and/or “Argenta” – touted her supposedly profitable futures and currency trading strategy when soliciting friends, family, former Harvard classmates, and individuals with connections to them. She proceeded to pool investor funds and incur heavy trading losses month after month in the futures and forex markets, yet repeatedly told investors that their investments were profitable and sent them monthly account statements showing fictitious profits. At times, Park used new investor funds to make Ponzi-like payments to earlier investors.
Specifically, from January 2012 through April 2016, Park raised at least $14 million from more than 30 investors. Park engaged in extremely active day trading, primarily in highly leveraged futures and forex trading. In the aggregate, of the approximately $18 million deposited to the trading account, Park accumulated realized losses totaling more than $16 million.
Just as recent as April, 2016, the NFA conducted an on-site examination of Phaetra Advisors. As part of the exam, the NFA staff interviewed Park. To conceal her fraudulent scheme from detection, Park made false statements to the NFA examiners.
Park, age 40, resides in New York, New York. Park attended Harvard University and was employed by various financial firms from approximately 1998 to 2008.
Andrew M. Calamari, Director of the SEC’s New York Regional Office stated:
“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.”
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today brought criminal charges against Park.
The SEC is seeking a permanent injunction as well as the return of alleged ill-gotten gains plus interest and penalties.
To view the SEC complaint with all the details click here.