SEC Charges New York Trader in Ponzi Scheme

The U.S. Securities and Exchange Commission (SEC) recently charged a New York City-based trader with defrauding investors out of millions of dollars. She is alleged to have accomplished this by misrepresenting her investment track record, the profitability of her investments and her use of investor funds.

According to the agency, Haena Park touted her supposedly profitable futures and foreign currency (forex) trading strategy when soliciting friends, family, former Harvard classmates and individuals with connections to them.

She then 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.

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At times, Park used new investor funds to make Ponzi-like payments to earlier investors. She raised at least $14 million from more than 30 investors since 2012 and suffered more than $16 million in trading losses during that time period.

Andrew M. Calamari, director of the SEC’s New York Regional Office, commented:

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 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.

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