Trader Accused Of $23M Investor Fraud

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Trader Accused Of $23M Investor Fraud

Haena Park, a New York foreign exchange trader, has been charged with investor fraud, claiming her investments were profitable when she actually lost over $16 million since 2012.

The SEC claims Park misrepresented her investment background in raising at least $14 million from over thirty investors for funds she operated under the name Phaetra and Argenta. While enduring major losses in the futures and forex markets, she allegedly fooled investors by, among other things, sending them monthly statements showing fictitious profits.

In a parallel criminal case, the U.S. Attorney’s Office for the Southern District of New York said Park defrauded investors out of more than $23 million since January 2010. According to the prosecution, she claimed annualized returns as high as 48.9% but lost about $19.5 million of the $20 million she had traded. Authorities believe she hid the losses by using $3 million in new investor funds to pay back previous investors in classic Ponzi fashion.

“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.

According to the SEC’s complaint, Park had been employed by a number of Wall Street firms from about 1998 to 2008, forming her own Argenta Group around May 2010 and beginning to actively solicit investors, including friends, family and former Harvard classmates.

The SEC described Park as an “extremely active” day-trader, primarily in highly leveraged futures and forex trading. But of the approximately $18 million deposited to her trading account, the SEC said, she lost more than $16 million and “withdrew approximately $1.5 million virtually wiping out the entire value.”

If convicted of commodities fraud and wire fraud in the criminal case, Park could face a maximum sentence of 10 years in prison and 20 years, respectively.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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