Alpha fund scandal: Allianz subsidiary in America fined billions

Dhe billions in losses by American traders with hedge funds from an Allianz subsidiary turn out to be a felony case. The chief investor for a number of “Structured Alpha” funds, Greg Tournant, and two fund managers have manipulated the event of the funds for years and understated the dangers related to the investments, the Justice Division mentioned on Tuesday in New York. Tournant, who Allianz fired on the finish of 2021, is accused of conspiracy, securities and funding fraud and obstruction of justice. A ministry spokesman mentioned he turned himself in to the authorities in Denver. Giant traders corresponding to pension funds had misplaced a complete of seven billion {dollars} with the funds when the capital markets collapsed in March 2020 in the Corona disaster. A number of funds had been wound up.

The American department of the asset supervisor Allianz World Traders, AGI US, which belongs to the Munich insurance coverage group, has pleaded responsible to not having seemed on the fund managers sufficient, the ministry mentioned. After a settlement with the ministry, Allianz is keen to pay a $2.33 billion penalty and $3.24 billion to compensate traders for his or her misplaced stakes.

However she can be waived $1.89 billion from the high-quality as a result of she had already paid extra compensation to traders, together with the Arkansas Academics’ Pension Fund. One other 463 million can be confiscated for the advantage of the state treasury. In a separate settlement, Allianz pays SEC $675 million. Allianz, which has now declared itself responsible of securities fraud, has already put aside 5.6 billion euros for the funding scandal. Because the group introduced, AGI US will now switch belongings beneath administration of 120 billion {dollars} “to a brand new US accomplice”, Voya Monetary. A corresponding declaration of intent has been signed.

Beforehand it had been assumed that the losses had been unhealthy hypothesis as a result of the fund managers had gotten chilly toes in the ups and downs of the markets. However based on their investigations, the US authorities accuse the fund managers of getting intentionally misled traders since not less than 2014. Greater than two dozen traders had sued AGI. Allianz boss Oliver Bäte admitted the debacle in August 2020 and pushed for a fast settlement after the insurer had all the time rejected the allegations till then.