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Former IMF Head's Hedge Fund Goes Bankrupt After Partner Suicide, Fraud

Tyler Durden's picture




 

It there is a better anecdote for everything the IMF stands for than the hedge fund of its former head, disgraced Dominique Strauss-Khan, going broke days after his partner, Thierry Leyne, 49, commits suicide in Tel Aviv under mysterious circumstances as reported previously, and subsequent revelations exposing at least one instance of fraud at the financial firm, we have yet to hear it.

former International Monetary Fund President Dominique Strauss-Kahn
seen here at a film festival in France in September: EPA

And while the tragic story of Thierry Leyne's untimely has been extensively circulated, what may be less known is that DSK's hedge fund may have imploded after a close encounter with a CYNK-like attempt to corner an illiquid company which however, blew up spectacularly in his face. The WSJ reported:

According to letters sent by Swiss hedge-fund firm Insch Capital Management SA to Luxembourg and Swiss financial regulators earlier this year and seen by The Wall Street Journal, an LSK unit had used money in Insch’s bank account to buy shares in a small Swiss insurance company without Insch’s knowledge. According to emails reviewed by The Wall Street Journal, employees of LSK said Insch instructed them to buy shares in the Swiss insurance firm.

 

The Swiss insurance company in question, Firstcaution SA, is thinly traded and majority-owned by LSK. The accusation of unauthorized trading comes as LSK regroups following Mr. Leyne’s death. A person familiar with the matter said Wednesday that Mr. Strauss-Kahn has left his role as chairman of the firm, while tradin

 

An LSK spokesman didn’t respond to requests for comment. A spokeswoman for Mr. Strauss-Kahn didn’t respond to a request for comment. On Tuesday, Assya Asset Management Luxembourg SA, the fund-management arm of LSK, filed an application for suspension of payments to creditors with the Luxembourg district court, according to a filing on the website of the Luxembourg financial regulator. Most of LSK’s website, including details of its operations and employees, had been removed by this past Tuesday.

 

* * *

 

According to a letter from Insch to the Luxembourg regulator, dated March 28 of this year and reviewed by the Journal, Assya had made “totally unauthorized purchases” of shares in Firstcaution and made a “false market for the FC shares.”

 

According to data from Euronext, on most of the days when trades occurred in 2011, only 10 shares of the little-trafficked firm typically changed hands per day, while there were no trades at all in 2012 or the first two months of 2013.

 

But volumes then spiked last year, with hundreds of thousands of shares changing hands on single days over the course of 2013, amounting to €6.6 million worth for the year.

 

A spokesman for Firstcaution said Wednesday that the firm is “currently putting together a group of investors (management & Swiss investors close to the company) to buy out the stake currently held by LSK Partners.” Firstcaution declined to comment about the trading patterns in its shares. In his letter to the Luxembourg regulator, Insch CEO Chris Cruden said Assya had tried to persuade Insch to buy shares in Firstcaution in September last year, but Insch declined.

Bottom line, there was at least one case of fraud involved at the fund, fraud which may well have been the reason for Leyne's suicide:

Although the two firms already had an agreement in place that allowed Assya to buy and sell shares in Insch’s account, LSK employees say in emails reviewed by the Journal that Insch specifically instructed them to buy the Firstcaution shares. Insch disagrees in the emails and says the firm repeatedly didn’t act on its instructions to reverse the trade.

Fast forward to first the still unexplained suicide of Leyne in late October, and now this:

Leyne, Strauss-Kahn & Partners, the financial-services firm that was headed by former International Monetary Fund chief Dominique Strauss-Kahn and late financier Thierry Leyne, said on Wednesday that it is insolvent.

 

The Luxembourg-based firm said in a short statement that, after the “tragic death” of Mr. Leyne, the board had discovered “additional commitments within the group of which it was unaware and which aggravate the delicate financial situation.” It added: “Consequently [the board] has decided to declare insolvency.”

...

Insurer Bâloise Luxembourg, part of the Swiss insurance group Bâloise Holding AG , also filed a complaint in the Luxembourg court against LSK over the failure to return a €2 million portfolio that had been invested by an LSK unit, a spokesman said.

The good news: the implosion took place before the hedge fund could drag down even more naive widows and orphans:

Earlier this year, the firm announced plans to launch a global macro hedge fund and to raise $2 billion, and Mr. Leyne and Mr. Strauss-Kahn had spent time meeting potential investors in China.

The bad news, if only for DSK, is that the former IMF head who was this close to becoming president for France if only it wasn't for his penchant for being at the wrong time and the wrong place, is truly cursed. The bad news for everyone else is that while DSK only harmed a few truly rich people, his successor at the IMF continues to do the same, only to everyone else.

 

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Thu, 11/06/2014 - 15:29 | 5420693 FOC 1183
FOC 1183's picture

Hide your kids, hide your maid

Thu, 11/06/2014 - 15:30 | 5420701 COSMOS
COSMOS's picture

But dont hide your staple gun, leave it out in the open.  Maybe leave a few spare boxes of staples just in case it takes a bunch to put down a banker scum.

Thu, 11/06/2014 - 15:30 | 5420707 jefferson32
jefferson32's picture

November 18th 2014 conforms to Lagarde's theorem (11+18+14=7), it is the 666th day since Obama's ritualistic inauguration, the 322th day of the year, 43 (=7) days away from year-end, the (7^2)th day since the first ebola patient in the US, the (7^3)th day since the occult mandela funeral, the 77th day since the sotloff/henning video, the 66th day since the haines video, and the 55th day since the gourdel video. If I were a sycophant occultist dipshit that'd be the day. Just a heads up.

 

Thu, 11/06/2014 - 15:36 | 5420727 max2205
max2205's picture

Check the suite cases

Thu, 11/06/2014 - 15:41 | 5420740 OW My Balls
OW My Balls's picture

Fraud ~ IMF ~ Murder/Suicided ~ Tel Aviv

 

Which one doesn't fit. Oh wait, they all do. Carry on

Thu, 11/06/2014 - 15:48 | 5420767 12ToothAssassin
12ToothAssassin's picture

DSK is doing alright

Thu, 11/06/2014 - 15:58 | 5420802 linniepar
linniepar's picture

What's better than a bagholder? A dead and bankrupt bagholder.

Thu, 11/06/2014 - 16:16 | 5420911 HardlyZero
HardlyZero's picture

DSK keeps his stick in the fire.  Bet Madoff or Corzine will show up on the scene.

They hang that way.

Thu, 11/06/2014 - 16:18 | 5420913 HardlyZero
HardlyZero's picture

(.)  oopsies.

Thu, 11/06/2014 - 16:36 | 5421002 Dame Ednas Possum
Dame Ednas Possum's picture

When you dance with the devil...

Thu, 11/06/2014 - 15:53 | 5420769 Lore
Lore's picture

Numerology = Chicanery

Thu, 11/06/2014 - 15:59 | 5420801 OW My Balls
OW My Balls's picture

You basically have a 1 in 9 chance about being right on anything. Better odds than winning your 10 team fantasy football league even if you know jack shit about football.

Thu, 11/06/2014 - 15:59 | 5420821 jefferson32
jefferson32's picture

For sane people indeed. Our overlords are not such people.

 

Thu, 11/06/2014 - 20:57 | 5422010 ebear
ebear's picture

22 that.

Thu, 11/06/2014 - 16:11 | 5420874 jefferson32
jefferson32's picture

Funny thing. November 18 2014 is also exactly 7*322 days before Lehman's actual bankruptcy filing (September 16 2008).

Thu, 11/06/2014 - 20:37 | 5421942 ebear
ebear's picture

(11+18+14=7)

this is the "new math" right?

Thu, 11/06/2014 - 15:42 | 5420739 madcows
madcows's picture

I think I'd rather die from a nail gun accident than a stapler accident.  Death by stapler sounds long, slow, and painful.

Thu, 11/06/2014 - 15:47 | 5420759 Consuelo
Consuelo's picture

"So lock up yer daughter, lock up yer wife, lock up yer back door, run for your life - the man is back in town..."

 

 

Thu, 11/06/2014 - 17:21 | 5421199 Squid Viscous
Squid Viscous's picture

re: Phil Rudd, prophetic lyrics

Thu, 11/06/2014 - 17:00 | 5421110 Jumbotron
Jumbotron's picture

Nail Gun = Bankruptcy

Thu, 11/06/2014 - 15:31 | 5420698 COSMOS
COSMOS's picture

Wonder how many staples are in Thierry's body.

Thu, 11/06/2014 - 15:38 | 5420730 JLee2027
JLee2027's picture

Probably more Nails than staples.

Thu, 11/06/2014 - 15:29 | 5420702 youngman
youngman's picture

was there any room service charges???

 

Thu, 11/06/2014 - 15:33 | 5420711 Bunga Bunga
Bunga Bunga's picture

My gosh, if you really knew....

Thu, 11/06/2014 - 16:17 | 5420891 Cacete de Ouro
Cacete de Ouro's picture

DSK counsel's opening speech to prosecution: "I challenge you to tell the difference between a naked prostitute and any other naked women"

DSK, beside counsel (thinking to himself): "Hmmm...that's an easy one. Let's see.
..better blowjobs, more noise, eh..and they're gone before I get out of the shower"

Thu, 11/06/2014 - 15:33 | 5420714 Uranus Hertz
Uranus Hertz's picture

Jump!

Thu, 11/06/2014 - 17:19 | 5420719 Squid Viscous
Squid Viscous's picture

brought to you by "Those nice folks next door" - David Irving

Thu, 11/06/2014 - 15:36 | 5420726 Shirley Swanepoel
Shirley Swanepoel's picture

Music to my ears!

Thu, 11/06/2014 - 15:37 | 5420731 firstdivision
firstdivision's picture

Were they short $NG, cause there is no reason for this idiotic move today, especially with last weeks injection far above estimates and far, far, far above historical average

Thu, 11/06/2014 - 15:42 | 5420743 Bell's 2 hearted
Bell's 2 hearted's picture

who is the chick?

Thu, 11/06/2014 - 15:44 | 5420750 william114085
william114085's picture

an ugly jew broad

Thu, 11/06/2014 - 17:20 | 5421189 Squid Viscous
Squid Viscous's picture

is there any other variety?

Thu, 11/06/2014 - 15:46 | 5420751 william114085
william114085's picture

an ugly jew broad

Thu, 11/06/2014 - 15:49 | 5420766 Toolshed
Toolshed's picture

It can't be his wife.

Thu, 11/06/2014 - 15:55 | 5420789 Lore
Lore's picture

Not ugly, but only vipers thrive in that environment -- not the kind you bring home to Mom and Dad.

Thu, 11/06/2014 - 16:40 | 5421015 zuuma
zuuma's picture

She's the life-support system for his pleasure sheath.

His life-like semen recepticle.

possibly also able to make dinner reservations.

Thu, 11/06/2014 - 18:21 | 5421431 Squid Viscous
Squid Viscous's picture

he brought his pet lizard to the event?

Thu, 11/06/2014 - 19:16 | 5421662 Jumbotron
Jumbotron's picture

Helen Hunt ?

Thu, 11/06/2014 - 16:01 | 5420825 SmittyinLA
SmittyinLA's picture

that's not a chick

Thu, 11/06/2014 - 17:47 | 5421305 Freddie
Freddie's picture

Looks like she has some adams apple thing going.

Thu, 11/06/2014 - 15:53 | 5420786 ajax
ajax's picture

 

 

DSK: the gift that just keeps on giving...

Thu, 11/06/2014 - 15:53 | 5420787 markar
markar's picture

DSK & Bernie Madoff

--Soulmates?

--Cellmates?

Thu, 11/06/2014 - 15:58 | 5420806 falak pema
falak pema's picture

Some Oligarchs never die; they let their buddies pay for the check.

I wonder if this is a world wide disease since the origins of time : the fall guy.

Thu, 11/06/2014 - 15:59 | 5420817 Duc888
Duc888's picture

 

 

Dead scumbags?    Bankrupted Ponzi corporations?  I think I just jizzed my pants a bit.

Thu, 11/06/2014 - 19:20 | 5421679 Jumbotron
Thu, 11/06/2014 - 15:59 | 5420820 ihatebarkingdogs
ihatebarkingdogs's picture

Reports of shitgum accidents are always welcome.

Thu, 11/06/2014 - 16:14 | 5420893 Panic Mode
Panic Mode's picture

21 nailgun fires salute

Thu, 11/06/2014 - 16:43 | 5421035 youngman
youngman's picture

Well he fucked the Maid..and now he Fucked thousands of other people...I see a trend here...

Thu, 11/06/2014 - 16:44 | 5421036 walküre
walküre's picture

Don't fuck with the tribe. Simple message.

Thu, 11/06/2014 - 16:56 | 5421096 justmy2cents
justmy2cents's picture

He doesn't own shares in nailgun companies does he?

Thu, 11/06/2014 - 17:19 | 5421188 Inbetween is pain
Inbetween is pain's picture

Mysterious circumstances??  More ZH bullshit.  Anytime someone in power dies an untimely death, ZH calls it mysterious or implies there's some kind of conspiracy.  Could it be the guy was just wanted to avoid a long prison sentence?

Thu, 11/06/2014 - 17:50 | 5421304 Clarabell
Clarabell's picture

"...Long prison sentence" Don't make me laugh! God's chosen tribal banksters never go to prison. Don't be so naive. (In less of course they screw over other tribal members.)

Thu, 11/06/2014 - 17:51 | 5421320 Bag Of Meat
Bag Of Meat's picture

Long prison sentence?? Please.. He could just ask Corzine how he does it

Thu, 11/06/2014 - 18:37 | 5421406 Emergency Ward
Emergency Ward's picture

Like the guys that shoot themselves ten times through the brain with a nail gun...

Thu, 11/06/2014 - 20:21 | 5421886 CoolBeans
CoolBeans's picture

Since when do banksters, et. al. get long prision sentences??

Thu, 11/06/2014 - 21:26 | 5422070 prymythirdeye
prymythirdeye's picture

Since when do bankers have consciences

Thu, 11/06/2014 - 17:39 | 5421270 Goldbugger
Goldbugger's picture

jump you fuckers.

 

your good at stealing and good at lying let's see how good you are at flying.

 

http://www.youtube.com/watch?v=9TYezSrzUUs

Thu, 11/06/2014 - 17:41 | 5421276 DOGGONE
DOGGONE's picture

USA coverup ... See the dirty look:
http://patrick.net/forum/?p=1223928

The public be suckered!

Thu, 11/06/2014 - 17:55 | 5421340 Shropshire Lad
Shropshire Lad's picture

Strauss-Kahn has been targeted by the criminal factions ever since he came out for a return to gold-backed currencies and the demise of the petrodollar.

Thu, 11/06/2014 - 19:29 | 5421708 Quaderratic Probing
Quaderratic Probing's picture

Momar, Sadam, Total CEO dare I say Vlad. Gold standard is badfor health.

Thu, 11/06/2014 - 18:21 | 5421426 BullyBearish
BullyBearish's picture

How come when these guys commit suicide, they don't take their buddies with them?

Thu, 11/06/2014 - 18:52 | 5421560 WTFUD
WTFUD's picture

The looks on the faces of the patsies yet to be exposed will be priceless. There shelters a DSK in every one of those Ivory Protected Towers and shit is seeping slowly through the floor boards and accumulating most vigorously around the central ceiling fan.

Thu, 11/06/2014 - 18:55 | 5421578 Fix It Again Timmy
Fix It Again Timmy's picture

Gold and silver don't do bankruptcy...

Thu, 11/06/2014 - 19:29 | 5421704 q99x2
q99x2's picture

Rollin rollin rollin. Keep them banksters squriming.

Putin. head em up ride em out let em jump

Yipee yi yipee ya yippy yip yip yip

One small step for a bankster and one giant leap for mankind.

We will come rejoicing bringing in the thieves.

Thu, 11/06/2014 - 21:44 | 5422136 red1chief
red1chief's picture

One small step for banksters, giant leaps for nail guns.

Thu, 11/06/2014 - 20:26 | 5421897 ebear
ebear's picture

"...Assya had made “totally unauthorized purchases” of shares in Firstcaution..."

LOL!  Is there such a thing as a partially unauthorized purchase?

I think the word unauthorized stands on its own, no?

This is almost as good as the one I heard yesterday on the BBC business report:

"The long term outlook for XYZ is favorable, at the moment."

Seriously, who writes this stuff?

Thu, 11/06/2014 - 21:48 | 5422144 red1chief
red1chief's picture

A hedge fund commited fraud? Turn over a few rocks and they'd see there's fraud all over the place.

Thu, 11/06/2014 - 23:39 | 5422478 fibonacci's claus
fibonacci's claus's picture

 i never knew strauss khan was a jew???

and who is that beautiful jewish princess next to him in that picture? 

wow.  she's a babe.

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