Allianz unit to pay $6 billion

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Bus drivers, subway chiefs and religious and charitable organizations across the country are among the victims of the scam, which fueled the decline of private investment funds that were once valued at $11 billion and caused $5 billion in losses for investors, officials said on Tuesday.

Additional details were expected to be released at a press conference to announce accusations of conspiracy, securities fraud and obstruction of justice against Gregoire Tournant, the former chief investment officer of a number of funds of Allianz Global Investors, one of the world’s largest financial services and insurance companies. companies.

Allianz Global Investors US LLC, a New York City-based investment advisor, has agreed to acknowledge its role in the fraud and pay $3.2 billion in damages, $2.3 billion in fines and $463 million in losses, prosecutors said in a statement.

The office of U.S. Attorney Damian Williams described the decision as “one of the most important corporate decisions in history.”

An indictment accused Tournant of defrauding investors in a series of mutual funds managed by Allianz from 2014 to March 2020.

Tournant returned to Denver Tuesday morning. A message has been sent to Tournant’s attorney for comment.

“Big scam”

In a statement, the Securities and Exchange Commission announced parallel civil charges against Allianz Global Investors US LLC and three former senior portfolio managers.

He said they have implemented a massive fraud scheme that hides the huge downside risks of a complex options trading strategy they call “Structured Alpha.”

AGI USA has marketed and sold the strategy to approximately 114 institutional investors, including pension funds for teachers, clergy, bus drivers, engineers and others, the SEC said.

The SEC said the scam originated with the March 2020 market crash caused by market turmoil caused by the spread of the coronavirus. According to the agency, when the market fell dramatically, the strategy marketed by AGI US lost billions of dollars due to misconduct by AGI US and its portfolio managers.

The scam has caused investors to lose over $5 billion, Gurbir S. Grewal, director of the SEC’s Enforcement Office, said in a statement.

“From at least January 2016 to March 2020, defendants lied about nearly every aspect of a highly complex investment strategy they were marketing to institutional investors, including pension funds that manage the retirement savings of ordinary Americans,” he said. “Although they were able to claim over $11 billion in investments by the end of 2019 and earned over $550 million in fees as a result of their lies, they lost over $5 billion in investor funds when market volatility in March 2020 revealed the real risk from their products.”

While the company earned over $550 million in fees, Grewal said, “the defendants lied about nearly every aspect of a highly complex investment strategy they were marketing to institutional investors, including the pension funds that manage the retirement savings of ordinary Americans.”