Dominique Strauss Kahn leaving his hotel in Lille
Former International Monetary Fund chief Dominique Strauss-Kahn was acquitted in France on pimping charges this month, but his legal headaches may not be over.
While Strauss-Kahn will try to put the Lille trial with its days of embarrassing testimony behind him, he and his lawyers must shift their focus to Luxembourg and the failure of a hedge fund that bore Strauss-Kahn’s name. The state prosecutor there is reviewing complaints stemming from the collapse last November of Leyne Strauss-Kahn & Partners following the suicide of Thierry Leyne, who had co-founded the investment firm with Strauss-Kahn months earlier.
“The cases in Luxembourg will drag on for at least two years,” said Lex Thielen, a Luxembourg lawyer who isn’t involved in the cases. “All of this will continue to weigh on his reputation and on him financially.”
Strauss-Kahn stepped down as head of the IMF in 2011 after being charged with sexually assaulting a New York hotel maid. That case was dropped and he reached a civil settlement with the woman in 2012, but his presidential ambitions were dashed. The French prostitution case and his business partner’s death have further damaged his efforts to rehabilitate his professional reputation.
Jean Veil, Strauss-Kahn’s lawyer, said by telephone that there have been no developments in his client’s case in Luxembourg and declined to comment further.
The Luxembourg chief prosecutor is weighing two complaints brought by the former directors of the fund and one by Strauss- Kahn, which he filed after he had stepped down from the fund’s board, Henri Eippers, a court spokesman, said.
Swiss insurer Baloise Holding AG is also seeking to recoup 2 million euros (USD2.3 million) a Luxembourg judge had ordered LSK pay the company in a separate dispute before granting LSK protection from creditors. LSK “failed to comply with agreed policies on general-risk standards,” Baloise spokesman Roberto Brunazzi said.
Leyne Strauss-Kahn & Partners was conceived as a hedge-fund vehicle that would draw on the Strauss-
Kahn name in emerging markets like China to raise $2 billion. Instead, the fund relied too much on DSK’s star power and not enough on investing credentials, said Mohamad Zeidan, who worked as the fund’s chief operating officer for two months.
The fund filed for bankruptcy in November 2014, before substantial operations ever got off the ground, amid speculation about the depth of Leyne’s financial troubles. The Baloise complaint stems from an earlier Leyne investment vehicle that had ties to LSK. Hugo Miller and Stephanie Bodoni, Bloomberg
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