November 3, 2022

Pensions & Investments Online

Pensions & investments: Pension fund, other shareholders reach $145 million settlement with AllianzGI

Pension & Investments recently reported on an SGT court filing which revealed that Allianz Global Investors has reached a $145 million settlement with the Knox County Pension & Retirement Board, Knoxville, Tenn., and other shareholders in mutual funds managed by the company, related to losses incurred by those funds. The lawsuit, filed in May 2021, was a consolidated class-action securities fraud lawsuit that had been filed in New York Supreme Court on behalf of individuals who had purchased, sold, or liquidated mutual funds shares managed by AllianzGI's Structured Products Group.

The lawsuit was the result of AllianzGI pleading guilty to Securities and Exchange Commission charges regarding the management of its Structured Alpha strategies. The SEC had charged that the company had abandoned its investment and risk management strategies in the management of its Structured Alpha strategies, which subjected investors to undisclosed risk and ultimately led to the massive losses the funds incurred in February and March 2020, when the COVID-19 pandemic roiled the markets.

AllianzGI pleaded guilty to the Securities and Exchange Commission charges on May 17, 2021, and agreed to pay more than $6 billion in restitution. The settlement also disqualified the company from providing advisory services to U.S.-registered investment funds for the next 10 years. Immediately afterward, AllianzGI announced plans to sell its U.S. investment management business to Voya Financial.

According to the original complaint, the lawsuit "holds Allianz responsible for similarly harming retail investors in certain Allianz-managed mutual funds and provides a significant recovery to these investors." AllianzGI spokesman John Wallace could not be immediately reached for comment. This settlement may provide some relief to AllianzGI and its investors as the company seeks to move past the legal and financial consequences of the SEC charges.

The full story can be read here.