Release:#4026-97

For Release:June 5, 1997

CFTC FILES ACTION AGAINST MICHAEL MYATT, PRAGMACAPITAL CORPORATION, AND THE BERKSHIRE INTERNATIONAL HEDGE FUND L.P. II, ALL OF BEAVERTON, OREGON, SEEKING PERMANENT INJUNCTION

CFTC Charges Defendants With Fraud and Unlawfully Acting as Unregistered Commodity Pool Operators

Defendants Consent to Entry of a Preliminary Injunction Freezing $1.9 Million of Customer Funds

WASHINGTON- The Commodity Futures Trading Commission (CFTC) announced today the filing of a three-count civil injunctive complaint in the U.S. District Court for the District of Oregon against Michael Myatt, PragmaCapital Corporation, and the Berkshire International Hedge Fund L.P. II, all of Beaverton, Oregon. None of the defendants has ever been registered with the Commission in any capacity.

The complaint, filed on June 4, 1997, alleges that from at least January 1996, Myatt, PragmaCapital Corporation, and the Berkshire International Hedge Fund L.P. II engaged in fraudulent conduct in connection with their activities as unregistered commodity pool operators, in violation of the Commodity Exchange Act (CEA).

Specifically, the complaint alleges that defendants solicited subscribers to the Berkshire Fund by representing that the fund would engage in the speculative trading of securities and commodity interests, including futures contracts and options on futures contracts. The complaint charges that defendants, among other things, fraudulently represented that they were earning profits of between 5 percent and 15 percent per month when, in fact, their trading was unprofitable, and customer funds were being misappropriated by the defendants.

Furthermore, the complaint charges that the defendants took in approximately $3.5 million from over 200 investors, and that they have lost in excess of $1.5 million in customer funds through trading, expenditure, or misappropriation.

Under the terms of a consent preliminary injunction entered by U.S. District Judge Malcolm F. Marsh on June 5, 1997, approximately $1.9 million dollars of customer funds have been frozen by court order, and the defendants have been ordered to provide to the court within 30 days a full accounting of all funds taken in and their disposition.

The CFTC's complaint ultimately seeks the entry of a permanent injunction prohibiting the defendants from violating the provisions of the CEA as charged, as well as other remedial relief, including an accounting, disgorgement of benefits, restitution to customers, and a civil monetary penalty of up to $110,000 ($100,000 for each violation occurring prior to November 27, 1996) or triple the monetary gain to each defendant for each violation of the CEA.