Brian Kim of New York faces over $12 million in penalties following a federal court order obtained by the U.S. Commodity Futures Trading Commission (CFTC) on April 15, 2011. Kim, along with his company Liquid Capital Management, LLC (LCM), was found liable for fraud related to the operation of a commodity pool.
Judge Denise L. Cote of the U.S. District Court for the Southern District of New York issued a default judgment requiring Kim and LCM to jointly pay $3,129,161 in restitution to defrauded customers and his Condominium Association. Additionally, a $9,387,483 civil monetary penalty was levied against them. The order permanently bars both Kim and LCM from engaging in any commodity-related activity and registering with the CFTC.
The case originated from a CFTC complaint filed on February 15, 2011, alleging fraudulent solicitation, misappropriation of funds, and misrepresentation to investors and regulatory bodies. The complaint detailed how Kim and LCM concealed their fraudulent activities by issuing false account statements to pool participants, falsely indicating the profitability of their investments.
Investigators discovered Kim also misappropriated over $400,000 from his Condominium Association in 2008 to cover futures trading losses. He further compounded the fraud by providing false statements to the National Futures Association (NFA) regarding the solicitation and trading of customer funds.
A New York County Grand Jury also indicted Kim and LCM in February 2011. The CFTC acknowledged the assistance of the NFA, the Hong Kong Securities and Futures Commission, and the New York County District Attorney’s Office in the investigation.
This enforcement action was led by CFTC staff members Lara Turcik, Nathan B. Ploener, Christopher Giglio, Judith Slowly, Manal Sultan, Kelly Mok, Annette Vitale, Lenel Hickson, Stephen J. Obie and Vincent McGonagle.
Source: CFTC.gov
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