FRANKFURT (Bloomberg) — A manager of Germany's K1 hedge fund was arrested yesterday as part of an investigation into the group, a prosecutor said.

Prosecutors in Wuerzburg, Germany, are investigating the 50-year-old man and other suspects for fraud and breach of trust after they received complaints, prosecutor spokesman Dietrich Geuder said in an e-mailed statement yesterday. The man wasn't identified.

Geuder said on Wednesday that his office is investigating Helmut Kiener, 50, the founder of K1 Group. Kiener's wife declined to comment when contacted by Bloomberg News yesterday before the statement came out. She said her husband wasn't available.

Prosecutors searched several homes on Wednesday, including the house of the man arrested, according to the statement.

The investigations centres on allegation that the K1 manager may have breached investment agreements with British and French banks.