Brian Kim (hedge fund manager)

Last updated

Brian Kim
Born1975or1976(age 48–49)
New Jersey, U.S.
Other namesBu Yung Kim
Occupationformer hedge fund manager
Known for Ponzi scheme
Criminal statusIncarcerated
Criminal chargePleaded guilty to charges including passport fraud, grand larceny, scheme to defraud, violation of the NY General Business Law (Martin Act), and falsifying business records
Penalty5 years, 7 months, to 15 years, 7 months in prison
Capture status
Arrested
Time at large
10 months

Brian Kim (also known as "Bu Yung Kim"; born 1975/1976) is an American former hedge fund manager. [1] [2] He founded the now-defunct Liquid Capital Management LLC, which focused on futures trading.

Contents

In 2011, he was found guilty of fraudulent solicitation, misappropriation, and misrepresentation to investors and regulatory organizations, and sought an injunction preventing him from trading in commodities futures and foreign currencies. A $12.5 million default judgement was entered against him, and he was banned from commodity trading.

In 2012, he pleaded guilty to charges including passport fraud, grand larceny, scheme to defraud, violation of the NY General Business Law (Martin Act), and falsifying business records to further a Ponzi scheme. He was sentenced to a term between five years, seven months and 15 years, seven months in prison.

Early career

Kim was born in the late-to-mid 1970s in New Jersey. [1] He graduated from Dartmouth College in 1997, where he had majored in economics and minored in art history. [3] [4]

He founded the now-defunct Liquid Capital Management LLC, which focused on futures trading, in 2002 and had an office on Broadway in New York City. [4] [5] [6]

In 2009, Kim twice appeared on CNBC's financial television news show Squawk Box , speaking as an expert about derivatives trading. [6] [7] [8]

Christodora House charges

Brian Kim owned and lived in an apartment at Christodora House. He was indicted and arrested in 2009, and accused of stealing $435,000 from the Christodora House condo association in 2008. [2] [5] [9]

Flight and arrest

Kim failed to appear at his trial in January 2011, and was charged with jumping bail. He had fled to Hong Kong after obtaining a new passport by saying his was lost. In fact it had been confiscated by authorities. [2] [5] He was taken into custody in Hong Kong in October 2011, and was returned to the United States. [2] [5]

Ponzi scheme charges and default judgment

After an investigation by the Commodity Futures Trading Commission (CFTC) into his hedge fund business, in February 2011, Kim was charged both civilly and criminally with financial fraud, grand larceny, and scheme to defraud for running a $6 million Ponzi scheme from January 2003 through January 2011, and cheating at least 45 investors from the West Coast while providing them with fake monthly performance statements. [2] [8] According to prosecutors, he misrepresented the quality of the investments to his clients, while stealing some of the money for himself. [5]

The CFTC sued Kim and Liquid Capital in February 2011, charging them with fraudulent solicitation, misappropriation, and misrepresentation to investors and regulatory organizations, and seeking an injunction preventing them from trading in commodities futures and foreign currencies. [5] [10] The agency said Kim and his employees told clients that Liquid Capital generated returns of more than 240 percent, when in fact they were losing money, and the only funds coming in were from new deposits by clients. [2] [5]

In April 2011, Judge Denise Cote of the U.S. District Court for the Southern District of New York found the defendants guilty of all charges. She entered a default judgment of $12.5 million against him, and he and Liquid Capital were banned from further commodity trading. [5] In addition, the court froze his assets. [10]

Guilty pleas and sentencing

In March 2012, he pleaded guilty to passport fraud by attempting to acquire a new passport from by claiming his was lost. In reality, his passport was already confiscated by prosecutors. [2] [6] He was sentenced in April 2012 to 14 months in prison. [5] [6]

On March 16, 2012, Kim pleaded guilty to nine of the 26 counts against him, including grand larceny, scheme to defraud, violation of the NY General Business Law (Martin Act), and falsifying business records in connection with the Ponzi scheme charge, and stealing $435,000 from the Christadora House. [5] [11] [12]

In April 2012, Kim was sentenced by Justice Charles H. Solomon in New York State Supreme Court in Manhattan to five to 15 years in state prison, [5] which was to commence after Kim had served seven months in federal prison on his passport fraud conviction. [6]

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References

  1. 1 2 Karen Freifeld (March 16, 2012). "Fugitive hedge fund manager pleads guilty". WDEZ. Archived from the original on October 19, 2014. Retrieved October 13, 2015.
  2. 1 2 3 4 5 6 7 Chris Dolmetsch and Tiffany Kary (November 4, 2011). "Liquid Capital's Brian Kim Pleads Not Guilty to Hedge-Fund Ponzi Charges". Bloomberg. Retrieved October 13, 2014.
  3. ↑ "NY Investor Charged With Running $4M Ponzi Scheme". Fox Business. February 15, 2011. Archived from the original on October 16, 2014. Retrieved October 13, 2014.
  4. 1 2 Lindsay Brewer (February 23, 2011). "Fugitive alum. indicted for fraudulent operation". The Dartmouth. Archived from the original on October 18, 2014. Retrieved October 13, 2014.
  5. 1 2 3 4 5 6 7 8 9 10 11 Dolmetsch, Chris; Glovin, David (April 20, 2012). "Hedge Fund Founder Kim Gets Five to 15 Years for Scheme". Business Week. Retrieved May 16, 2016.
  6. 1 2 3 4 5 "Hedge fund manager sentenced for Ponzi scheme". Reuters. April 20, 2012. Archived from the original on October 19, 2014. Retrieved October 13, 2014.
  7. ↑ Nitasha Tiku (February 17, 2011). "Hedge Fund Ponzi Schemer Has Surprisingly Lowbrow Appetites". Daily Intelligencer. Retrieved October 13, 2014.
  8. 1 2 Melissa Grace (February 15, 2011). "CNBC pundit and hedge-fund operator at heart of $4 million Ponzi scheme". NY Daily News. Retrieved October 13, 2014.
  9. ↑ "CNBC pundit and hedge-fund operator at heart of $4 million Ponzi scheme". New York Daily News . February 15, 2011.
  10. 1 2 CFTC Release: pr6028-11; New York Federal Court Orders Brian Kim and Liquid Capital Management, LLC, to Pay More than $12 Million in Restitution and Monetary Sanctions for Commodity Pool Fraud; Defendants were indicted by a New York County Grand Jury in February 2011. April 21, 2011
  11. ↑ "DISTRICT ATTORNEY VANCE ANNOUNCES GUILTY PLEA OF BRIAN KIM IN $6 MILLION PONZI SCHEME AND 2009 GRAND LARCENY CASE". The New York County District Attorney's Office. March 16, 2012. Archived from the original on October 19, 2014. Retrieved October 13, 2014.
  12. ↑ "Ex-NY hedge fund head who fled admits $4M swindle; Former Liquid Capital Management manager Brian Kim admitted to stealing more than $4 million from investors and hundred of thousands of dollars from his condominium board". Crain's New York Business. March 16, 2012. Retrieved October 13, 2014.
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