Release Number 7382-16
June 3, 2016
CFTC Charges Haena Park and Her Companies Phaetra Capital GP LLC, a/k/a/ Argenta Capital GP LLC, Phaetra Capital Management LP, a/k/a Argenta Capital LLC, and Argenta Group LLC with Misappropriation and Fraud
The Complaint also charges Park and Yul Kaseman with False Statements to the NFA
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action in the U.S. District Court for the Southern District of New York, charging Haena Park (Park) and her companies Phaetra Capital GP LLC, a/k/a/ Argenta Capital GP LLC, Phaetra Capital Management LP, a/k/a Argenta Capital LLC, and Argenta Group LLC, (collectively, Pool Defendants) with fraudulently operating a commodity pool and misappropriation of pool participants’ assets. The complaint also charges Park and Yul Kaseman with making false statements to the National Futures Association.
The CFTC complaint charges that from at least January 2010 through the present (the Relevant Period), Pool Defendants engaged in at least two fraudulent schemes in violation of the Commodity Exchange Act (Act): (1) the Pool Defendants fraudulently solicited at least $23 million from members of the public to participate in a commodity pool that traded futures contracts, as well as leveraged or margined retail off-exchange foreign currencies, and (2) Park, as the agent and officer Argenta Capital LLC, a predecessor of Phaetra Management, duped at least one investment firm to authorize Park to manage the firm’s investment account.
The CFTC complaint alleges that the Pool Defendants fraudulently solicited approximately 50 members of the public (pool participants) who deposited over $23 million into bank accounts opened in Park’s name and/or controlled by Park. In her solicitations, Park made material misrepresentations and omissions concerning her trading expertise and the purported profits she generated from her trading. For example, Park falsely claimed that an initial investment in November 2009 of $1 million achieved a cumulative return of 393.2% and grew to $4,778,229 by February 27, 2015.
According to the Complaint, Park’s trading on behalf of the pool participants resulted in a loss of more than $18 million. Park hid these losses from the pool participants and falsely and fraudulently represented to existing and prospective pool participants that their funds were trading at a profit. To perpetrate her fraud, the complaint alleges, Park provided pool participants with false monthly statements with fabricated data.
Of the pool participants’ assets not lost in trading, the complaint further alleges that Park misappropriated portions of pool participants’ funds, using some of the funds from pool participants to make payments to other pool participants, in the manner akin to a Ponzi scheme, and to pay personal credit card bills, make cash withdrawals and pay other non-business related expenses not authorized by the pool participants.
In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws, as charged.
The CFTC appreciates the assistance of the National Futures Association, the United States Attorney’s Office for the Southern District of New York, the U.S. Department of Homeland Security and the Securities and Exchange Commission.
CFTC Division of Enforcement staff members responsible for this action are Greta G. Gao, Luke B. Marsh, Dmitriy Vilenskiy, Michael P. Geiser and Paul G. Hayeck.
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CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: June 3, 2016