Founder of K1 under arrest

City A.M. Reporter
GERMAN authorities placed Helmut Kiener, founder of Germany&rsquo;s K1 hedge fund group, under arrest yesterday in a multi-million-dollar corruption probe of a Caribbean- registered fund he ran.<br /><br />His arrest warrant said Barclays and BNP Paribas may have lost millions of dollars in the case, which prosecutors say spanned the Atlantic and featured lavish personal spending on planes, a helicopter and luxury properties.<br /><br />FBI agents in Miami also arrested a German wealth consultant and Kiener business partner on money-laundering charges.<br /><br />Authorities are investigating Kiener, 50, over allegations of fraud and breach of trust, Dietrich Geuder, chief prosecutor in the southern German city of Wuerzburg said.<br /><br />&ldquo;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,&rdquo; prosecutors said in a statement.<br /><br />The case centres on the K1 Global Sub Trust hedge fund run by Kiener, a psychologist by training who once sold ads for the Yellow Pages in Germany before moving into the financial sector.