Monday, August 02, 2021
Share crashes
US judiciary targeting Allianz funds
The negligent behavior of Allianz fund managers is said to have cost investors in the US billions. Now a wave of lawsuits is pounding on the insurer. The company’s board of directors fears that it will have a significant impact on future financial results. This is already noticeable on the stock market.
In the US, the alliance is grappling with an investigation by the US Department of Justice into claims for damages by potent investors. The plaintiffs accuse the Munich-based asset manager Allianz Global Investors of corona-related losses of billions. After the securities regulator SEC, the US Department of Justice has now launched an investigation, the alliance said. As a result, the Allianz share on the Frankfurt Stock Exchange fell by over seven percent to 194 euros by midday, the lowest it has been since the end of January.
The Allianz board of directors spoke of a “relevant risk” that the matter could have “significant effects on future financial results of the Allianz Group”. According to US media reports, the plaintiffs include the New York Metro, the teacher pension fund in the state of Arkansas and the Teamsters union.
The allegations amount to the fact that the AGI fund managers did not adhere to their own guidelines and did not react appropriately to the market development in the early phase of the corona pandemic, which in turn is said to have caused the high losses of the investors. According to its own admission, the alliance cooperates fully with the securities regulator and the US Department of Justice.
AGI is based in Frankfurt and is the smaller of the two Allianz asset management companies, while the US subsidiary Pimco is much larger. The lawsuits concern so-called Alpha Funds of AGI, which suffered significant losses in the past year. Allianz asset management as a whole got through the year comparatively well in 2020 thanks to the rapid upturn in the financial markets after the first corona shock in spring, but according to the Allianz annual report that was mainly due to Pimco. To date, Allianz has not made any provision for any litigation costs. It is currently neither possible to predict the outcome of the investigations and the court proceedings, nor to estimate their timing, it said.
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