Private investors who lost millions in an alleged German Ponzi scheme are threatening legal action against UK banking groups Barclays and HSBC, as well as Rabobank of the Netherlands, claiming the banks may have acted irresponsibly, according to the Financial Times.

German authorities are already mounting a criminal probe into the business of Helmut Kiener, founder of the K1 hedge fund group, who state prosecutors allege stole upwards of €300 million (around $390 million from investors and banks.

Since the financial turmoil began more than two years ago, a number of actual or alleged Ponzi frauds have come to light, the most spectacular of which was the $65 billion fraud of Bernard Madoff. That fraud prompted soul-searching among the wealth management industry, as a number of banks had clients who had been hit by Madoff.

Kiener was arrested in October and taken to jail in Würzburg, southern Germany, where he remains in custody.

His lawyer Lutz Libbertz said after the arrest that his client had done nothing wrong. He argued last November that Mr Kiener could “at the most be accused of making bad investment decisions, but not of actions constituting breach of trust”.

Barclays declined to comment when contacted by WealthBriefing. HSBC did not immediately respond to calls. 

Rabobank said it had a policy not to comment on “this kind of story”, the FT said.