KL Fraudster In Contempt, Soon To Be In Jail

Nov 28 2006 | 11:04am ET

John Kim just can’t seem to help spending other people’s money.

The founder of the defunct Florida hedge fund KL Group is in trouble again, facing arrest for failing to repay $2.8 million, as was ordered by a federal judge.

The Securities and Exchange Commission shut KL down last year on fraud and securities law violation charges. The court-appointed receiver, Guy Lewis, estimates the scam cost investors as much as $150 million. Lewis has recovered a mere $4.3 million.

Judge John Ryskamp’s order accused Kim of falling “far short of meeting his burden to establish compliance with the preliminary injunction order by returning the frozen assets he misappropriated.”

So much for frozen: The SEC alleges Kim has used proceeds of the sale of personal property—which he is required to turn over to Lewis—for personal use, and has been traveling widely, within the country, of course, to Virginia, Texas and California from his South Florida base, the South Florida Business Journal reports.

“What made this so egregious is that we gave him opportunities to repatriate stolen money, for the benefit of defrauded investors,” Lewis said. “He has abused the good graces of the receiver, the SEC and the federal district court judge.”

Ryskamp said Kim could be jailed for up to 18 months for contempt in the civil case, “until he purges his contempt either by paying the funds or proving, categorically and in detail, his inability to do so despite good-faith efforts.”


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.