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.