NEW YORK (Reuters) -Germany’s Allianz SE has agreed to pay about $6 billion and a U.S. asset management unit will plead guilty to fraud after a group of its multibillion dollar investment funds collapsed amid market turmoil triggered by the coronavirus pandemic in 2020.
The U.S. Department of Justice, which announced the payout and plea, also said Gregoire Tournant, the former chief investment officer for the Structured Alpha funds, is being indicted for conspiracy, securities fraud, investment advisor fraud and obstruction of justice.
Allianz’s payout includes a $2.33 billion fine, $3.24 billion of restitution and $463 million of forfeiture, according to a plea agreement.
The Justice Department also said Allianz is paying a $675 million civil fine to settle a related U.S. Securities and Exchange Commission probe.
Allianz was not immediately available for comment. A lawyer for Tournant could not immediately be reached for comment.
The Structured Alpha funds once had more than $11 billion of assets under management, but lost more than $7 billion when the spread of COVID-19 set off wild stock market swings in February and March 2020.
Investors, who filed more than two dozen lawsuits, accused Allianz of straying from its stated investment strategy of hedging to limit potential losses.
(Reporting by Jonathan Stempel in New York and Tom Sims and Alexander Huebner in Munich; Editing by Chizu Nomiyama and Tomasz Janowski)
