SEC Alleges $600K Fraud by New Jersey Man Claiming Trading "Luminary"

The U.S. Securities and Exchange Commission (SEC) has charged Kenneth Thom, a New Jersey resident, with defrauding more than fifty investors in an alleged offering scheme that raised over $600,000.

According to the SEC’s complaint, Thom promoted himself online under the aliases “K Money” and “K$,” claiming to be a trading “luminary” and a “former Wall Street market maker” with an “illustrious career.” In reality, the SEC alleges, Thom’s securities industry experience was limited, and his license has remained suspended by the Financial Industry Regulatory Authority (FINRA) since 2011.

Thom allegedly solicited funds through a Facebook group he operated, encouraging investors to send funds to one or more “Shared Accounts” that he would trade on their behalf. Investors were allegedly told that profits would be split evenly, with Thom retaining 50% and he investors sharing the other 50% on a pro rata basis. 

The complaint further alleges that Thom misappropriated approximately $235,000 of investor funds for personal expenses, including luxury purchases and a vacation rental. He is also accused of making material misrepresentations about his trading performance in the so-called Shared Accounts and misrepresenting how investor funds were being used.

Filed in the U.S. District Court for the Southern District of New York, the SEC’s complaint seeks permanent injunctive relief, including conduct-based injunctions, disgorgement of all ill-gotten gains and prejudgment interest, and a civil penalty.

The case highlights ongoing concerns about unverified investment promotions on social media and the risks associated with self-styled trading experts operating outside the regulatory framework.

In July, the SEC charged First Liberty Building & Loan, LLC, and its founder, Edwin Brant Frost IV, with orchestrating a $140 million Ponzi scheme.