Legal
US Department Of Justice Probes Allianz Over Funds Losses - Report
The German firm faces at least 25 investor law suits, including those filed by a number of US institutional investors.
The US Department of Justice is reportedly probing funds run by
German insurer and asset manager Allianz that used complex
options strategies to make money but incurred big losses when the
pandemic prompted huge stock market gyrations in February and
March 2020.
At least 25 investor lawsuits, predominantly by US public pension
funds, have been filed against Allianz for a total of about $6
billion in damages, Reuters reported. The US Department
of Justice investigation into Allianz is looking at possible
misconduct by fund managers and misrepresentation of risk to
investors, the newswire said, citing unnamed sources.
Family Wealth Report has contacted Allianz for comment,
and may update in due course. It hadn’t received a reply at the
time of going to press.
Allianz disclosed the probe on August 1, referring to the
“Structured Alpha Funds”. The US Securities
and Exchange Commission launched a probe last year. The
statement said “Allianz Global Investors US LLC has received a
voluntary request for documents and information from the DOJ.
Allianz is fully cooperating with the SEC and the DOJ in the
investigations and has immediately started its own review of this
matter.”
The firm said it has not yet made a provision for any potential
costs associated with court proceedings and investigations, as
the outcome or timing was unknown.
The Reuters story said the DOJ is examining whether
managers at Allianz Global Investor’s Structured Alpha Funds
abandoned a strategy to protect against market crashes and how
they communicated the amount of risk to investors.
The newswire said that the DOJ and Allianz declined to comment on
the nature of the investigation, which could lead to criminal
charges.
The Arkansas Teacher Retirement System filed a lawsuit in July
2020 seeking $774 million in damages. The report said that other
pension funds involved in suits include those of New York subway
workers and city of Milwaukee employees.
