SEC Hearing Set for Fugitive Fund Managers

Two West Palm Beach, Fla., hedge fund managers accused of defrauding investors of $70 million remain fugitives and are unlikely to appear at a Sept. 28 administrative hearing before the Securities and Exchange Commission, an agency lawyer said Thursday.

The hearing is scheduled to determine whether Won Sok Lee and Yung Bae Kim of KL Group forged documents to show their six hedge funds were generating annual returns as high as 150%, according to the SEC. A federal court in West Palm Beach on Aug. 15 told the defendants to stop violating securities law.

“The last info we had was that both took plane trips to Korea in late February and early March,” said Scott Masel, senior trial counsel for enforcement at the SEC’s Miami office. Although no fines will be assessed in the hearing, an administrative law judge could bar the defendants from working in the investment advisor and securities industry.

Lee, 34, a resident of Singer Island, Fla., and Kim, 34, of Irvine, managed more than $200 million in assets. SEC examiners visited the offices of Shoreland Trading, an Irvine brokerage owned by Lee and Kim, on Feb. 22 where they interviewed the two men, the Palm Beach Post reported. The two men were to meet with the SEC the following day and only Kim showed up before he disappeared, the Post said.