Dominique Strauss-Kahn return to finance clouded by death of business partner Thierry Leyne

Leyne was accused of making "unauthorised deals" by Swiss hedge fund before his death in apparent suicide

Disgraced French politician Dominique Strauss-Kahn (Getty Images)

The return of Dominique Strauss-Kahn to finance has come under renewed scrutiny after it emerged his late business partner Thierry Leyne had been embroiled in a dispute with a Swiss investor before his death in an apparent suicide last week.

Leyne, chief executive and co-owner of Leyne, Strauss-Kahn Partners, fell to his death from a Tel Aviv building on 23 October.

Just three days before his tragic death, Mr Strauss-Kahn announced he would be stepping down as chairman of LSK & Partners "to dedicate himself to other activities".

The former head of the International Monetary fund had acquired a 20 per cent in the firm last year in an effort to rebuild his career.

Mr Strauss-Kahn resigned as managing director of the International Monetary Fund in an embarrassing episode after he was accused of raping a hotel maid in 2011.

Now it has emerged his late business partner was in dispute with a Swiss hedge fund which accused him of making unauthorised trades with its money.

Insch Capital Management made a formal complaint to Swiss regulators claiming that LSK & Partners made "totally unauthorised purchases" of shares in Firstcaution, an insurer of which LSK & Partners owned a majority stake.

Insch claims LSK used $400,000 from the firm's funds deposited in VP Bank- a private bank headquartered in the Principality of Liechtenstein- to buy shares in Firstcaution.

Insch's chief executive, Christopher Cruden, told The Independent neither his firm nor clients lost money after Mr Leyne agreed to refund the money.

In a separate development, LSK's fund management arm, Assya, was granted a suspension of debt payments in a Luxembourg court on Thursday as it seeks to win protection against creditors, including Swiss insurance group Baloise, which recently sued the firm for two million euros.

Shares in LSK & Partners were suspended last week and have lost more than half of its market value.

Mr Strauss-Kahn's stake was worth 20 million euros when he joined the firm last year. LSK & Partners has taken its website down and could not be reached for comment.