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Arrest of K1 Principal Linked To US Money-Laundering Probe - Report
Nick Parmee
30 October 2009
The founder of the K1 hedge fund group was arrested in Germany as the US authorities revealed a money-laundering probe that people familiar with the matter said had connections to the European inquiry, according to the Financial Times. Helmut Kiener is in jail after prosecutors said they were investigating allegations of fraud and breach of trust against him involving dealings with global banks. Prosecutors said: “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 funds amounting to multiple millions contrary to agreements.” People familiar with the matter in the US confirmed a report by the Miami Herald newspaper that arrests in the US were linked to the inquiry into K1. Reports earlier this week said that a number of large banks, including Barclays and JP Morgan, suffered losses as a result of the activities of K1.