Lawyer warns of 'new Madoff case' in Germany

1st November 2009, Comments 0 comments

The German financial market watchdog BaFin has been checking on K1 since at least June 2004, and forbid it at that time from operating in Germany.

Frankfurt -- German lawyer Klaus Nieding told AFP Friday he feared a "new Madoff case" owing to a growing number of calls from investors who might be victims of fraud at the speculative German fund K1.

"We are receiving more and more calls" about the fund, said Nieding, who specialises in defending financial investors.

"We can speak of a new Madoff case, the sums are certainly not as large, but on a German scale it is already very big," he added in reference to Bernard Madoff, convicted of massive fraud in a US case.

"Estimations of damages run from 500 million to one billion euros (740 million to 1.48 billion dollars), of which half involves institutional investors," Nieding said.

K1 founder Helmut Kiener was incarcerated late Thursday.

Prosecutors in the southern city of Wuerzburg suspect Kiener of "not respecting investment instructions given by a British bank and a French bank."

They are also investigating allegations of fraud and embezzlement, a statement said.

The French bank BNP Paribas is among the investors concerned and an investigation has also begun in the United States.

The German financial market watchdog BaFin has been checking on K1 since at least June 2004, and forbid it at that time from operating in Germany.

K1 was organised as a holding company for several speculative hedge funds.

AFP/Expatica

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