Wednesday, 23 July 2014
Last updated 1 hour ago
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.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…