A former broker has been sentenced for a scheme in which he raised money from investors who followed him on social media and then misappropriated the funds for his own luxury purchases, Financial Advisor reports.
The U.S. Department of Justice said that 42-year-old Kenneth Thom of Belleville, New Jersey, a/k/a “K$,” a/k/a “K Money,” was sentenced by U.S. District Judge Edgardo Ramos to two years in prison for investment adviser fraud.
In January 2011, the Financial Industry Regulatory Authority suspended Thom’s broker registration after he failed to pay an arbitration award to an investor. Thom also admitted to FINRA that he had commingled the client’s money with his own money in an account he controlled and then lost the money trading. He further admitted that when the investor sought to withdraw her funds, he did not tell her he lost it and instead invented fake excuses, then ignored the investor altogether.
After being suspended by FINRA, prosecutors said Thom turned to social media under the monikers “K$” and “K Money,” and promoted himself online as a successful trader, a “Wall Street veteran,” a “luminary,” and a “beacon of knowledge.” He allegedly used his online platforms to sell trading courses and trade suggestions to his followers, including a Facebook group in which he posted the results of his purportedly successful trades.
“Beginning in late 2023, Thom invited members of the K$ Facebook Group to participate in “shared accounts” that Thom would manage in exchange for a percentage of the trading profits,” the U.S. Attorney’s office said. “Thom eventually raised nearly $800,000 from approximately 67 clients. Of this sum, Thom invested only approximately $350,000, diverting most of the remainder for his own personal use, including on travel, dining, and luxury goods.”
Of the $350,000 that Thom invested, he lost more than $250,000 trading options for a net loss of approximately 73%. To hide the losses, prosecutors said he published false performance updates showing significant gains. For example, on or around July 3, 2024, THOM posted in the K$ Facebook Group that each of his three purported shared accounts was positive year-to-date, with returns ranging from 4% to 120%. In fact, as of the close of the preceding trading day, Thom had lost approximately 31% of the client funds he invested to date.
Thom pleaded guilty to the fraud in March.
“Kenneth Thom sold his social media followers the image of a successful trader when, in reality, he was a suspended broker,” said U.S. Attorney Jamie McDonald. “He took nearly $800,000 from investors who believed he would invest their money and instead spent it on luxury goods for himself. That deception ends with this federal prison sentence.”
In addition to the prison term, Thom was sentenced to two years of supervised release. He was also ordered to pay forfeiture and restitution to his victims, each in the amount of $724,756.09. Prosecutors had requested a prison term of 36 months.
In the sentencing letter, the assistant U.S. attorney said he “terminated the scheme only because his investors were demanding their money back, and the handful he refunded he charged 20%.” The letter also mentioned that at the time of his sentencing Thom still held on to a Maserati and two Porsches.
In a parallel action, the U.S. Securities and Exchange Commission filed civil charges against Thom in August 2025.
The attorneys at Hyman Cotter have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
