Assistant U.S. Attorney Nicolas Roos argued that Tournant’s deception lured investors into the Structured Alpha funds and caused them to lose $3.2 billion of principal investments. “The victims would not have invested or would have withdrawn [their] investments” if they had known the truth, Roos said.
Defense attorney Seth Levine countered that Tournant’s misrepresentations were not responsible for the losses. He noted that Tournant was on medical leave in March 2020 when others at AGI liquidated the funds during the market’s sharp downturn, amplifying losses.
“The driver of the loss … was the remarkable, unprecedented events of the [COVID-19] crisis,” Levine argued.
Judge’s Decision
Judge Swain ultimately sided with the defense, determining the government had failed to prove Tournant’s dishonesty caused the $3.2 billion loss. With the loss amount deemed zero, sentencing guidelines recommended six to 12 months in prison.
Swain expressed concern for Tournant’s health, stating she was unconvinced the Federal Bureau of Prisons could provide adequate care. While calling his actions “serious and systemic,” the judge highlighted his unique medical circumstances as a reason to forego incarceration.
Broader Case and Aftermath
Allianz resolved related allegations in May 2022, agreeing to pay over $6 billion. Its U.S. subsidiary, AGI, pleaded guilty to securities fraud, alongside former managing directors Stephen Bond-Nelson and Trevor Taylor. Allianz has since transferred AGI’s investment management operations to Voya Financial.
