The arrests and the hundreds of millions of dollars in potential losses notwithstanding, is the alleged fraud at German fund of hedge funds firm just a simple case of lost in translation? Or an accounting snafu?
Cautioning against boldness, the firm's auditor--a professor of finance and accounting at an august German institution of higher education--wants us to remember that "until now nothing has been proven." After all, that country's financial authorities and courts can't even decide if the firm can even be regulated, let alone prosecuted.
K1's founder, Helmut Kiener, is accused of ripping off his banks and brokers to the tune of $400 million. But this is a man who deals in euros, not dollars. How else to explain the fact that he's listed his beachfront Florida home for twice what it's worth?
Helmut Kiener, the K1 Group hedge-fund founder under arrest in Germany on suspicion of fraud, is seeking to sell his oceanfront home in Delray Beach, Florida, for $23 million to repay investors, people briefed on the matter said....
"They are not going to get $23 million," said Sandra Strickland, an independent Realtor in Delray Beach, about 50 miles north of Miami, as she stood outside the house last week. "Right now, we are mostly flooded with $200,000-and-under properties," said Strickland, who estimated it's worth about $12 million.
The house, called by real-estate agent Premier Estate Properties "lavishly scaled yet eminently inviting, may be extravagant by Bernard Madoff standards . But it still features a chandelier over the bath tub and "exotic marble and onyx throughout." Oh yea, and "at least five televisions hung from the ceiling" and "fingerprint access," according to Bloomberg. Not to mention the "outdoor amphitheater."
K1 auditor says would be "bold" to conclude fraud [Reuters]
German watchdog lacks bite in face of K1-type funds [Reuters]
Kiener Said to Seek $23 Million for Six-Bedroom Home in Florida [Bloomberg]