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| LIBERATOR... |
 Posted: Wed Nov 04, 2009 3:18 am |
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Gary Gary Gary...
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http://online.wsj.com/article/SB125683220208116301.html
http://k1grp.com/
OCTOBER 30, 2009 K1's Kiener Is Arrested in German Fraud Case
By DAVID CRAWFORD
BERLIN—Police arrested the founder of German investment firm K1 Group,
Helmut Kiener, in connection with a fraud investigation at the firm, a
local prosecutor said Thursday.
European and U.S. authorities are investigating whether K1 embezzled
millions of dollars from several global banks, including J.P. Morgan
Chase & Co., Barclays PLC, BNP Paribas SA and Société Générale SA, the
prosecutor said.
The case is gripping the financial community in Germany, as
prosecutors suspect losses could exceed $200 million if the
allegations prove correct, a person familiar with the investigation
said.
This is a screen shot of the biography page of Helmut Kiener, founder
of the K1 Fund Allocation System, on the K1 Group Web site, seen on a
computer monitor in Berlin, Germany, on Wednesday.
Neither Mr. Kiener, who has been detained, nor his attorney could be
reached for comment. Heidi Queren, who identified herself as an
employee at Mr. Kiener's Aschaffenburg office, said her employer
didn't appear for work on Thursday. She said Mr. Kiener's lawyer hopes
to respond quickly. She said Mr. Kiener and his staff are innocent.
A person familiar with the investigation said Barclays invested about
$220 million and BNP Paribas invested about $60 million in a K1
investment vehicle. The banks have had several months to reduce their
exposure, this person said, so any losses to the banks could be less.
A spokesman for Barclays says the bank is cooperating with the
investigation. A BNP Paribas spokesman said the French bank was
"cooperating with authorities in charge of the investigation." A
Société Générale spokeswoman said the French bank has negligible
exposure to K1 Group. J.P. Morgan declined to comment.
Germany's financial oversight agency issued a warning about Mr. Kiener
in 2001, when it prohibited him from administering investments in
financial instruments related to his K1 fund, according to a statement
from the Bafin, the German oversight agency. Mr. Kiener responded by
appealing the regulator's prohibition and moving some of his business
operation out of Germany, someone familiar with the investigation
said.
Dietrich Geuder, the German prosecutor in the city of Würzburg where
the case is being handled, said his office requested the pretrial
detention of Mr. Kiener, 50 years old, after a preliminary
investigation revealed what he says is evidence that Mr. Kiener may
have misused funds obtained through agreements with the banks.
A spokesman for the German prosecutor said authorities suspect Mr.
Kiener of providing falsified information to the banks, and embezzling
the funds he received.
A second person has also been formally named a suspect by prosecutors
but hasn't been detained because, unlike Mr. Kiener, the individual is
not considered a flight risk, Mr. Geuder said.
On Wednesday police searched the homes and offices of both Mr. Kiener
and the second suspect, whom prosecutors haven't named, seizing
computers and business records, according to prosecutors and a member
of Mr. Kiener's staff.
—David Gauthier-Villars and Marshall Eckblad contributed to this
article. |
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