In its ongoing effort to get to the bottom of the collapse of the purported hedge fund firm K.L. Group, the Securities and Exchange Commission recently secured from a federal judge a permanent injunction against the firm's principals, Won Sok Lee and Yung Bae Kim. Their whereabouts remain unknown, according to Hedge World News.
Kim worked with Lee to control the investment advisory firms, the hedge funds and its Shoreland Trading unit, according to the SEC.
According to the article, together, between about 1999 and 2005, the two men raised about $250 million from some 300 investors, including at least one professional golfer and several prominent South Florida businessmen. KL Financial and related entities defrauded investors by proclaiming lights-out annualized returns of 127% since inception in 1997, while in reality the fund lost big in risky, aggressive trades, according to the SEC. Last year, KL Group started a new fund that bet on a severe downturn in stock prices. Instead, prices rose in 2005. Most of the money is missing now, along with Messrs. Kim and Lee.