Allianz Global Investors US, the U.S. subsidiary of the German financial firm, has admitted violations of U.S. securities laws with its “structured Alpha” program, which dates back to at least January 2016 and was exposed in March 2020, the U.S. securities firm said. stock market downturn. and the Trading Commission.
Allianz Global and two of the three portfolio managers named in the complaint also agreed to plead guilty in a parallel criminal case, the SEC said.
Allianz and three portfolio managers manipulated key financial data to make the losses appear smaller than they actually were, the agency said.
But when Covid-19 hit the U.S. in March 2020, the pandemic-induced market crash showed that Allianz had misled investors about risk, “the fund suffered catastrophic losses and investors lost dozens of billion,” the SEC said.
Allianz Global agreed to pay about $1 billion in fines and disgorgement, while the company and its German parent company will pay victims more than $5 billion in damages, the statement said.
“The victims of this misconduct include teachers, clergymen, bus drivers and engineers whose pensions are invested in institutional funds to support their retirement,” said SEC Chairman Gary Gensler, lamenting “a recent incident. A series of cases involving derivatives and complex products hurt investors across the market.”
Two of the three Allianz global officials named in the case, co-chief portfolio manager Trevor Taylor and portfolio manager Stephen Bond-Nelson, have agreed to plead guilty in the case. The government also charges chief portfolio manager Gregoire Tournant.