Allianz Global Investors U.S. to Pay $6 Billion to Settle Fraud Charges

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Tournant was the Chief Investment Officer (CIO) of Structured Alpha Funds, which were marketed primarily to institutional investors. He and his co-conspirators, Taylor and Bond-Nelson, misled approximately 114 institutional investors including pension funds for bus drivers, clergy, engineers, teachers, and more than 100,000 individual investors.

The defendants told their victims that the Structured Alpha Funds were protected with particular hedges from the sudden crashes of the stock market crash. However, in 2015, Tournant decided to lie and secretly purchase cheaper hedges that provided lesser protection to investors.

The former AGI US CIO and his co-conspirators provided investors with falsified documents to conceal the actual performance and real risks of the Structured Alpha Funds’ investments. The defendants also altered documents to hide the fact that they were buying cheaper hedges.

In March 2020, the Structured Alpha Funds lost more than $7 billion im market value. The funds ultimately collapsed due to the stock market downturns, which were primarily caused by the COVID-19 pandemic.