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: Pantheon’s McCrary Says Private Equity Market ‘Robust’

Dec 17 2014 | 8:32am ET

Dennis McCrary is a partner at Pantheon, a private equity firm with $32.2 billion...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

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

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

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.