U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20766 / October 2, 2008
Securities and Exchange Commission v. Michael Jinyong Park, Individually, and Doing Business as Park Capital Management Group, Civil Action File No. 3:08-CV-00962 (M.D.TN)
The Securities and Exchange Commission ("Commission") today announced the filing of a civil injunctive action against Michael J. Park ("Park"), individually, and doing business as Park Capital Management Group ("PCMG"), of Brentwood, TN. The Commission's complaint, filed on September 30, 2008 in the United States District Court for the Middle District of Tennessee, alleges that from 2001 to June 2008, Park engaged in securities fraud by convincing investors to transfer money to Park to manage through PCMG by representing to them that they would earn substantial returns on their PCMG accounts through investments in publicly traded securities and/or in investment pools that Park managed. According to the complaint, once the investors transferred funds to PCMG, Park misappropriated the funds to subsidize his lifestyle and to finance a mortgage business that he owned and controlled. The Commission's complaint further alleges that to induce investors to open accounts with him, Park told investors that he and PCMG generated high annualized returns. For example, according to the complaint, one investor invested $1.2 million over a three-month period after Park told him that PCMG's managed accounts had annual returns of 28%. The complaint alleges that Park further represented to the investor that he would receive annualized returns of 36% if he kept his investment with PCMG for 18 months. Similarly, the complaint alleges that Park told another investor that he would receive annualized returns of at least 20% to 25% by investing in an investment pool.
According to the Commission's complaint, to further his fraudulent conduct, Park provided fraudulent stock purchase confirmations and/or quarterly account statements to investors on PCMG letterhead showing that various stocks had been purchased for their accounts. These confirmations and quarterly statements also falsely showed investors that their investments had grown significantly, in one instance by as much as 25% in one quarter.
The complaint alleges that Park admitted his fraud to investors in a letter, dated June 30, 2008, in which he told investors that their accounts with "Park Capital Management Group had no current liquid value" and that he was "unable to return the value of their investments." The complaint further alleges that Park also admitted that 15 to 18 of the PCMG accounts were not "legitimate.
The Commission's complaint seeks permanent injunctions against Park from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the complaint seeks disgorgement of Park's ill-gotten gains plus prejudgment interest thereon and civil penalties.
The Commission acknowledges the assistance and cooperation of the U. S. Attorney's Office for the Middle District of Tennessee and the Nashville Field Office of Federal Bureau of Investigation.