U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19600 / March 8, 2006
Securities and Exchange Commission v. K.L. Group, LLC, et al. , Case No. 05-80186-CIV-RYSKAMP (S.D.Fla.)
Judgment of Permanent Injunction and Other Relief Entered Against Defendant John Kim
The Securities and Exchange Commission ("SEC") announced that on March 2, 2006, the Honorable Kenneth L. Ryskamp United States District Judge for the Southern District of Florida entered a Judgment of Permanent Injunction and Other Relief against Defendant John Kim ("Kim"). The Judgment, entered with the consent of Kim, without admitting or denying the allegations of the SEC's complaint, enjoins him from violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; aiding and abetting in violation of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Additionally, the Judgment provides for disgorgement and the imposition of a civil penalty in amounts to be determined by the Court upon the SEC's motion.
The SEC commenced this action by filing its complaint on March 2, 2005, against Kim, among others. The complaint alleged that from approximately 1999 to March 2005, the Defendants raised at least $81 million from investors nationwide by boasting annualized returns of 125 to 150% over the last several years and by sending false account statements to investors showing similar gains. According to the complaint, the hedge funds were suffering tremendous trading losses and little remained of the more than $81 million that investors put into the hedge funds.