A brash Kuwaiti financier facing a fraud suit by US authorities was found dead on Sunday in an apparent suicide that sent shockwaves through the Gulf financial sector.

A security source told Reuters that Hazem Al-Braikan appeared to have died from a single gunshot wound to the side of the head, while a policeman standing outside Braikan's house said the well-connected financier, 37, had shot himself.

Al-Braikan was the chief executive of Al Raya Investment, which is 10 percent owned by Citigroup, and had been at the centre of a financial scandal that erupted last week.

'It's very sad news. This crisis has seen a lot of people in the Gulf and across the world fall from grace, and each person is different in terms of their ability to handle pressure,' said Mohammed Yasin, chief executive of Dubai-based investment bank Shuaa Securities.

The US Securities and Exchange Commission filed a lawsuit against him and two other finance firms last week, saying they had improperly earned millions of dollars from trades in two US firms, Harman International Industries and Textron.

A policeman at Al-Braikan's two-storey villa in the Kuwait City neighbourhood of Al-Rawda told Reuters that Al-Braikan's brother had called for help.

An employee at Al Raya said Al-Braikan, who was single, had not come to work on Sunday, the start of the working week in the Gulf region.

'We are shocked. Everybody is shocked,' the employee said by telephone. 'We called his brother, and he confirmed the news.

'He was here at the office yesterday until 7 or 8 at night. I don't know why he decided to end it.'         

Al-Braikan's death comes on the heels of another financial scandal that has rocked the Gulf region, involving two Saudi conglomerates.

Regulators and bankers are grappling with the fallout from debt restructuring and fraud allegations at privately held Saad Group and Ahmad Hamad Algosaibi & Bros.

Algosaibi has sued the head of Saad Group in a New York court for fraud in a case involving allegations of $10 billion in loan irregularities.

Investors have been left largely in the dark on the case, the biggest blow to hit the Middle East since the financial crisis.

The SEC's lawsuit, which also names a Bahrain bank and a state-linked Kuwaiti firm, will intensify focus on concerns about transparency and weak regulation in the Gulf region.

Opec member Kuwait is home to the Arab world's second largest bourse, yet it is the only Gulf state without a stock market regulator, as plans have been stalled in parliament for years.

'This incident will shed the light on the need for tougher legislation for bourse trading and leaked media reports in Kuwait,' said a Kuwait-based trader.

Reached by Reuters on July 25, the day before his death,  Al-Braikan declined to comment on the case. 'I have nothing to say. It is in the hands of the lawyers now.'    

Hours later, he issued a statement saying he had named a US attorney to defend him, declaring: 'I would like to confirm on the soundness of my legal situation.'    

In papers filed in Manhattan federal court last week, the SEC said Al-Braikan and entities linked to him earned more than $5 million from well-timed trades in the two US firms.

Other defendants include United Gulf Bank and Kipco Asset Management Company (Kamco). Both are part of the Kuwait Projects Company (Kipco) group. All the firms have denied the allegations.

Kamco and United Gulf Bank said on Friday they made no gain from trading in the shares of Harman and Textron.

Shares in Kipco slid 3.5 percent on the Kuwaiti bourse on  Sunday, on the first trading day after the lawsuit was filed.

The SEC said it