Release: 4172-98
    (Civ 97-838)

For Release: July
    28, 1998

OREGON DISTRICT
    COURT ISSUES PERMANENT INJUNCTION AGAINST MICHAEL MYATT, PRAGMACAPITAL
    CORP., AND BERKSHIRE INTERNATIONAL HEDGE FUND, ALL OF BEAVERTON, OREGON,
    ORDERING RESTITUTION TO DEFRAUDED INVESTORS

State of Oregon
    Joined CFTC as Co-Plaintiff in the Anti-Fraud Action Charging that
    Defendants Committed Fraud by Providing False Statements and
    Misappropriating Funds, Among Other Violations of Federal Commodity and
    State Securities Law

WASHINGTON -- The
    Commodity Futures Trading Commission (CFTC) and the Oregon Department of
    Consumer and Business Services announced today that on July 22, 1998, the
    Honorable Garr I. King, U.S. District Judge for the District of Oregon,
    entered a consent order of permanent injunction against Michael
    Myatt, PragmaCapital Corporation, and the Berkshire
    International Hedge Fund II L.P., all of Beaverton, Oregon. None of the
    defendants has ever been registered with the CFTC in any
    capacity.

The Oregon
    Department of Consumer and Business Services joined the action as
    co-plaintiff on January 16, 1998.

Court's Order
    Finds that Defendants Received About $3.9 Million from at least 168
    Customers to Pool for Trading Commodity Futures and
    Securities

The order, which
    stems from a three-count CFTC injunctive complaint filed on June 4, 1997
    (see CFTC News Release 4026-97, June 5, 1997), finds that the defendants
    committed fraud in connection with the operation of an unregistered
    commodity pool. Under terms of the consent order, Myatt agrees to make
    restitution to customers.

Specifically, the
    order finds that from January 1996 through June 1997, Myatt solicited,
    accepted, and received $3,931,524 from at least 168 customers to pool for
    trading commodity futures and securities. The order finds that Myatt
    violated the anti-fraud provisions of the Commodity Exchange Act (CEA) and
    Oregon Securities law by fraudulently reporting profits and issuing false
    statements to customers regarding purported profits earned, when, in fact,
    the accounts had incurred significant losses.

Defendants
    Falsely Reported Profits of Between 171 Percent and 422 Percent
    Annually

According to the
    order, the defendants falsely reported profits of between 171 percent and
    422 percent per year, including monthly profits ranging from 8 percent to
    15 percent. Funds deposited for participation in the pool were not kept
    separate from the defendants' assets and were used for personal expenses,
    to pay referral fees or commissions to persons who solicited additional
    investors, or for operating expenses. The order states that in excess of
    $1.8 million was lost in trading or spent by the defendants.

Additionally, the
    order finds that the defendants acted as a commodity pool operator (CPO)
    without being registered as such with the CFTC, and that defendants
    violated Oregon Securities law by selling securities without being properly
    licensed to sell securities or to act as an investment advisor.

Finally, the order
    permanently enjoins the defendants from committing further violations of
    the CEA and Oregon Securities law as charged, from acting in any capacity
    requiring registration with the CFTC or licensing under Oregon Securities
    law, and from trading on any commodity futures contract market.

Receiver to
    Distribute Approximately $2 Million to Investors

The order directs
    Gilardi and Company, as the court-appointed Permanent Equity Receiver
    (Tel:[415] 461-0410), to prepare a distribution plan for the defendants'
    assets and, with court approval, distribute funds on a pro-rata basis. The
    Receiver holds approximately $2 million in defendants' assets.

Furthermore, the
    order directs the defendants, depending on their income level, to continue
    to make repayments of customer losses for five years to the National
    Futures Association, acting as Monitor.