NEW YORK (Reuters) – German insurer Allianz has agreed to pay about six billion dollars (5.7 billion euros) and one of its asset management subsidiaries in the United States will plead guilty in the case of the bankruptcy of several funds sunk by the financial turbulence caused in 2020 by the coronavirus crisis, announced Tuesday the American Minister of Justice.
He specified that Gregoire Tournant, the former director of investment strategy for the “Structured Alpha” funds, had been charged with criminal association, stock market fraud, investment advice fraud and obstruction of justice.
Allianz undertook to pay 2.3 billion dollars in fines and 3.24 billion in damages, in addition to 463 million in confiscations.
The Minister of Justice specified that the German group would also pay 675 million dollars in civil fines to close the investigation opened into the file by the Securities and Exchange Commission (SEC), the authority of the American financial markets.
Allianz declared that these amounts were covered by the provisions already made in respect of this litigation.
A lawyer for Gregoire Tournant could not immediately be reached to comment on this information.
“Structured Alpha” funds represented up to more than 11 billion dollars in assets under management, but their value fell by more than seven billion during the global financial storm of February-March 2020, at the very beginning of the coronavirus.
Investors, led by an Arkansas state education pension fund, have filed more than 20 lawsuits accusing Allianz of deviating from its hedging strategy to try to cover its potential losses.
(Report Jonathan Stempel New York, Tom Sims and Alexander Huebner Munich; French version Marc Angrand, told by Kate Entringer)