U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19967 / January 12, 2007

SEC v. Jung Bae Kim, a.k.a. "John Kim," Won Sok Lee, Yung Bae Kim, KL Group, LLC, KL Florida, LLC, KL Triangulum Management, LLC, and Shoreland Trading, LLC, Case No. 06-80197-CR-Ryskamp/Hopkins

Hedge Fund Fraud Defendants John Kim, Won Lee, Yung Kim, and Others Indicted

The United States Securities and Exchange Commission ("SEC") announced that on December 15, 2006, the United States Attorney for the Southern District of Florida indicted Jung Bae Kim, a.k.a. "John Kim," Won Sok Lee, Yung Bae Kim, KL Group, LLC, KL Florida, LLC, KL Triangulum Management, LLC, and Shoreland Trading, LLC (collectively, "the criminal defendants") on thirty-five counts of committing and conspiring to commit wire and mail fraud and money laundering while orchestrating a massive hedge fund fraud. The indictments became public on January 9, 2007, when John Kim was arrested before his arraignment in the United States District Court for the Southern District of Florida, where he is already incarcerated after the District Court held him in contempt for violating an asset freeze order issued in an SEC securities fraud case against the criminal defendants and others.

The SEC filed its securities fraud action on March 2, 2005, against the criminal defendants, among others, alleging that from approximately 1999 to March 2005, they raised tens of millions of dollars from investors nationwide by boasting annualized returns of 125 to 150% and sending false account statements to investors showing similar gains. According to the SEC's complaint, the hedge funds actually were suffering tremendous trading losses, and little remained of investors' money. The SEC has already obtained permanent injunctions against Defendants John Kim, Yung Bae Kim, and Won Sok Lee, and its case is continuing.

For additional information, see Litigation Releases No. 19117 (March 3, 2005), and No. 19399 (September 29, 2005).