Skip to main content

The collapse two years ago of a pair of Allianz hedge funds wasn’t just an unfortunate matter costing investors some several billion dollars. It wasn’t just a lawsuit magnet and tremendous personal tragedy for Allianz CEO Oliver Bäte. Nor was it just another opportunity to embarrass German regulators. It wasn’t just a massive hole blown in Allianz’s bottom line. It was all of those things, of course. But it was also, as the Justice Department strongly suspected, criminal.

An American subsidiary of the insurer, Allianz Global Investors U.S., pleaded guilty Tuesday to securities fraud for failing to stop the scheme, which came to light after the funds collapsed early in the pandemic, losing more than $7 billion before they were shut down, according to court filings by federal prosecutors.

The fraud involved three former portfolio managers, including the funds’ former chief investment officer, who misled investors for at least four years by concealing the risk they faced, prosecutors said….

[Former chief investment officer Gregoire] Tournant was charged with fraud and obstruction of justice in an indictment unsealed on Tuesday. The other portfolio managers, Stephen Bond-Nelson and Trevor Taylor, pleaded guilty in March and are cooperating with the government, prosecutors said.

Allianz subsidiary pleads guilty over a $7 billion investment implosion. [NYT]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Related

urinals

Always Have A Better Plan B Than Asking To Go To The Bathroom And Just Not Coming Back

Because the SEC and Justice Department? Yea, they’re gonna come back.

jail

If You’re Gonna Inflate Valuations, Best To Avoid The ‘Impossible’

Unless you are aiming for simultaneous knocks on the door from the FBI, SEC and CFTC. Then it’s fine.

coronavirus

Allianz Still Struggling With Terrible COVID Side Effects

Specifically, a Justice Department probe to go along with the SEC investigation and shareholder lawsuits.

gavel-money-bills-law-legal-litigation-finance-300x221

Texas Real Estate Executives Guilty Of Proving Kyle Bass Right

And, also, relatedly and with the prospect of decades in prison attach, conspiracy and fraud.