Former Superintendent of St. Paul Charter School Agrees to Pay $220,000 Settlement
A St. Paul charter school’s founder and former superintendent has agreed to pay the Minnesota Attorney General’s Office $220,000 as part of a settlement agreement after it alleged she lost more than $4 million of the school’s money in an illegal hedge fund investment. The settlement comes after Minnesota Attorney General Keith Ellison sued Christianna Hang in December, alleging she invested $5 million of Hmong College Prep Academy’s money without the approval of the school’s board of directors.
According to the school’s 2021 year-end audit, the value of the investment fell to $684,762. State law prohibits schools from investing in hedge funds, which often use risky investment strategies. Ellison stated, “The lapse in judgment that led Ms. Hang to invest millions of nonprofit assets into an obscure hedge fund is truly astonishing.” He added, “I am pleased that we were able to obtain as much relief as possible for Hmong College Prep Academy in this action.”
Background of the Investment and Settlement
The investment in question was made in 2019, and it was allegedly done on the advice of Kay Yang, an unregistered investor from Wisconsin. Hang chose Woodstock Capital Partners, a New Jersey hedge fund, for the investment. However, the school later sued Woodstock in federal court in 2021 after the investment details became public. Under a separate settlement agreement, Reiner and Woodstock are to pay Hmong College Prep Academy $400,000.
Hang resigned from the school in 2021 after the investment details became public and the school was criticized in a report from the Office of the Minnesota State Auditor. Ellison’s office then began an independent investigation. A federal court in Wisconsin later ordered Yang to pay millions in restitution and penalties related to her unregistered investment activity. Hang and her husband lost $125,000 of their own money investing with Yang, according to Ellison.
Conclusion and Next Steps
The settlement agreement between Hang and the Minnesota Attorney General’s Office will provide partial compensation to Hmong College Prep Academy for its loss. The charter school will receive the $220,000 payment from Hang. Ellison’s office will give the money to the school to help offset the loss. For more information on this story, visit Here.
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