Allianz Fund Collapse Ends With Guilty Plea, $5.8 Billion Payout

AllianzNo comment, only a few extracts from the article below:

  • Gregoire Tournant, the former chief investment officer and co-lead portfolio manager of the funds, was arrested in Colorado and separately charged with fraud.
  • In late 2015, the fund “abandoned the promised hedging strategy and instead began to purchase cheaper hedges“.
  • That change was not disclosed to investors.
  • Five of the Florida-based Structured Alpha funds lost between 49% and 97% of their value. The funds ended up losing $7 billion during the tumultuous early days of the pandemic in 2020.
  • No one at AGI US or Allianz was verifying that Tournant and his colleagues were actually adhering to the investment strategies promised to investors.
  • AGI will plead guilty to a single count of securities fraud. The agreement calls for the firm
    • to forfeit $463 million and
    • pay $3.2 billion in restitution to victims of the fraud as well as
    • a $2.3 billion penalty.
  • Lawyers for Tournant called the case against their client “meritless and ill-considered”. He will fight it in court.
  • The two other portfolio managers, Stephen Bond-Nelson, 51, and Trevor Taylor, 49, pleaded guilty to conspiracy and fraud in March.


The unit’s guilty plea is one of the few for the banking industry, which has often agreed to deals with prosecutors without admitting wrongdoing.


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Written by Gontran de Quillacq

Gontran de Quillacq is an expert witness and a legal consultant. He is a recognized authority in options, trading, derivatives, structured products, portfolio management, hedge funds, mathematical finance, quantitative investment, strategy research and financial markets in general.


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