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December 7, 2022
On December 6, 2022, New York Supreme Court Justice Andrew Borrok preliminarily approved a $145 million settlement reached between SGT’s clients and Allianz Global Investors U.S. LLC’s Structured Products Group. The settlement resolves plaintiffs’ claims of fraud and mismanagement relating to the mutual funds committed by several employees of AllianzGI that comprised the "Structured Products Group." Judge Borrok’s Order can be found here.
The Structured Products Group marketed the investment vehicles it offered—including the AllianzGI Mutual Funds—as market-neutral and designed to provide protection against a market crash. As a result, the Structured Products Group’s offerings attracted billions of dollars of institutional investor money. However, when COVID-19 caused market turmoil during February and March 2020, the Structured products Group’s investment vehicles lost approximately $7 billion, including hundreds of millions of losses suffered by the AllianzGI Mutual Funds.
As a result of the fraud, on May 17, 2022, AllianzGI announced that it would plead guilty to securities fraud and forfeit $463 million and pay $3.2 billion in restitution to victims as well as a $2.3 billion penalty. AllianzGI also got credit for $1.9 billion that has already been paid to victims via settlements of legal proceedings.
Two AllianzGI employees also pleaded guilty to conspiracy and fraud and cooperated with the government’s investigation. A third employee and the “mastermind” of the fraud—Gregoire Tournant—pleaded not guilty.
The case is Jackson v. Allianz Global Investors U.S. LLC, Index No. 651233/2021 (N.Y.S.), and is currently pending before Justice Andrew Borrok of the New York State Supreme Court, New York County Commercial Division.