Barclays Sued Over K1 Fraud

Jan 17 2013 | 1:40pm ET

Barclays may be among the biggest losers in the K1 Group hedge fund fraud, but that hasn't stopped other victims from suing the bank over it.

Some 150 lawsuits have been filed against the bank in Germany by K1 investors, a lawyer for those investors said today. Another 220 claims could eventually be added; they are currently in mediation, Klaus Nieding said.

"Barclays in a big way distributed so called X1 certificates by" K1 founder Helmut Kiener, who admitted to running a €345 million fraud and was sentenced in 2011 to more than 10 years in prison, Nieding said. "We estimate the total volume of certificates with Kiener products issued by Barclays at €300 to €400 million."

Barclays called the lawsuits "wholly without merit."

"The German courts have found in Barclays' favor in all decisions to date with a recognition that Barclays is also a victim of the Kiener fraud," Barclays spokesman Jon Laycock said.

Barclays and BNP Paribas, K1's bankers, suffered losses of €223 million in the scheme, with Barclays taking the lion's share of those losses.


In Depth

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note