Another billionaire hedge fund manager arrested for possible fraud

A German man who founded the hedge fund group K1 was arrested by police amid an investigation into possible fraud that may total some euro200 million ($295.7 million), prosecutors said Thursday.
OCT 29, 2009
A German man who founded the hedge fund group K1 was arrested by police amid an investigation into possible fraud that may total some euro200 million ($295.7 million), prosecutors said Thursday. Billionaire Helmut Kiener, 50, was accused of betrayal and breach of trust, his lawyer Lutz Libbertz told The Associated Press Thursday. Kiener was arrested after investigators raided his home in Aschaffenberg on Wednesday after prosecutors in Wuerzburg said he was being investigated for fraud and breach of trust in relation to the British Virgin Islands-based K1 Global Sub Trust. According to prosecutors, there "is a suspicion that the 50-year-old suspect did not comply with investment guidelines agreed with an English and a French bank among others and has used several millions in funds contrary to agreements." A court ruled later Thursday that Kiener would remain in custody. Germany's financial markets regulator, BaFin, would not comment on the case, but said that it had banned Kiener from being involved in the management of financial portfolios in 2001 and added that it had also banned finance commission deals by K1 Invest in 2004. The allegedly defrauded companies, according to the arrest warrant, include Barclays Bank PLC and BNP Paribas SA. BNP Paribas declined to comment. Barclays Capital, the investment banking division of Barclays Bank, declined to comment on the arrest, saying only that it was cooperating with the investigation. Spokesman Daniel Hunter declined to go into any further detail. Attempts to contact K1 at its offices in Tortola, British Virgin Islands, were not successful. Calls to Kiener's home were not answered. Kiener, on his personal Web site, touted his K1 Fund Allocation System. He said he developed it and put it into place in 1996 has had more than 80 percent positive months since its inception and net income in excess of 770 percent. According to his Web site, Kiener studied social pedagogy and then psychology. After starting his career in market research in 1987, he moved into advertising and then started the hedge fund. Since 2001, he's also done freelance work as an investment advisor, which included advising a hedge fund from the Central Bank of the Netherlands. In May 2005 he started as a fund manager and advisor to X1 Allocation Fund GmbH.

Latest News

SEC Says Game Service Roblox Part of ‘Active Investigation’
SEC Says Game Service Roblox Part of ‘Active Investigation’

Short sellers previously said the company was under investigation, though Roblox denied allegations.

Musk’s DOGE descends on CFPB with intention to shut it down
Musk’s DOGE descends on CFPB with intention to shut it down

The Consumer Financial Protection Bureau is in the crosshairs of the Republican group that is widely attempting to dismantle government agencies.

Advisor fighting Finra banishment loses $17.7 million dispute with old firm
Advisor fighting Finra banishment loses $17.7 million dispute with old firm

National Securities Corp. sued the advisor in 2020, alleging breach of contract and unjust enrichment.

Job numbers, inflation leaving room for Fed to hold rates
Job numbers, inflation leaving room for Fed to hold rates

Recent data support a measured pace by the Federal Reserve for the year ahead.

Private assets remain hot despite surging stock market
Private assets remain hot despite surging stock market

Financial advisors are still adding alternatives despite the surge in publicly traded stock prices

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.