Palm Beach Post – In the latest twist in the saga of failed hedge fund KL Financial, head trader John B. Kim admits he defied a federal asset freeze by using money earmarked for investors to speculate on futures contracts  and that he quickly lost $650,000.
KL Financial either lost or stole $213 million, and its collapse made waves in Palm Beach, where many of its well-heeled clients lived.
Kim, one of the founders of the West Palm Beach hedge fund, acknowledged in a court document that he sold his wife’s Mercedes for $70,000 last year and began trading futures based on U.S. stocks and the euro.
After losing that money, he pawned his Porsche 911 for $40,000 and used $384,658 from the sale of his condo in Korea to trade futures. Kim said he traded profitably at first, boosting his account to $650,000. Then, he said in a court document and an interview, he lost it all.
All of this happened after a federal judge in March 2005 froze Kim’s assets and ordered the proceeds from the Korean condo to be returned to investors.
Now, the Securities and Exchange Commission and the court-appointed receiver for the case are asking U.S. District Judge Kenneth Ryskamp to put Kim in jail for contempt of court.
