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Allianz unit to pay $6 billion over “large” investor fraud


Bus drivers, subway conductors and spiritual and charitable organizations nationwide have been among the many victims when fraud sped up the downfall of personal funding funds as soon as value $11 billion, inflicting a lack of $5 billion for buyers, authorities mentioned Tuesday.

Extra particulars have been anticipated to be launched at a information convention to announce conspiracy, securities fraud and obstruction of justice fees towards Gregoire Tournant, the previous chief funding officer for a sequence of funds at Allianz International Traders, one of many world’s largest monetary companies and insurance coverage firms.

Allianz International Traders US LLC, a New York Metropolis-based funding adviser, has agreed to plead responsible to its position within the fraud and pay $3.2 billion in restitution, a $2.3 billion advantageous and to forfeit $463 million, prosecutors mentioned in a launch.

The workplace of U.S. Lawyer Damian Williams known as it “some of the vital company resolutions in historical past.”

An indictment charged Tournant with defrauding buyers in a sequence of funding funds managed by Allianz from 2014 via March 2020.

Tournant turned himself in Tuesday morning in Denver. A message for remark was despatched to Tournant’s lawyer.

“Huge fraudulent scheme”

In a launch, the Securities and Change Fee introduced parallel civil fees towards Allianz International Traders U.S. LLC and three former senior portfolio managers.

It mentioned they carried out a “large fraudulent scheme that hid the immense draw back dangers of a posh choices buying and selling technique they known as ‘Structured Alpha.'”

The SEC mentioned AGI US marketed and bought the technique to about 114 institutional buyers, together with pension funds for academics, clergy, bus drivers, engineers and others. 

The fraud was uncovered by the March 2020 market crash attributable to the tumult to markets that resulted from the unfold of the coronavirus, the SEC mentioned. When the market dropped dramatically, the technique marketed by AGI US misplaced billions of {dollars} because of misconduct by AGI US and the portfolio managers, in keeping with the company.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, mentioned in a launch that the fraud prompted buyers to lose over $5 billion.

“From not less than January 2016 via March 2020, the defendants lied about almost each facet of a extremely advanced funding technique they marketed to institutional buyers, together with pension funds managing the retirement financial savings of on a regular basis Individuals,” he mentioned in an announcement. “Whereas they have been in a position to solicit over $11 billion in investments by the top of 2019 and earn over $550 million in charges because of their lies, they misplaced over $5 billion in investor funds when the market volatility of March 2020 uncovered the true danger of their merchandise.”

The corporate earned over $550 million in charges whereas “the defendants lied about almost each facet of a extremely advanced funding technique they marketed to institutional buyers, together with pension funds managing the retirement financial savings of on a regular basis Individuals,” Grewal mentioned.



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