Allianz has agreed to pay over $6bn regarding a criminal securities fraud on the collapse of its US Structured Alpha Funds. Allianz would have to pay a $2.33bn criminal fine, $3.24bn in restitution, a $675mn civil fine settlement with the SEC and forfeit $463mn. The fund, which had an AUM of ~$11bn, lost over $7bn after the pandemic began. Prosecutors said that the US unit, Allianz Global Investors US LLC, “misled teacher pension funds, clergy, bus drivers, engineers and other investors by understating the funds’ risks and overstating how well they were being monitored”. Besides, they also inflated the funds’ performance to increase personal pay and collected 30% of excess returns over relevant benchmark indexes. Allianz pleading guilty now carries a 10Y ban on providing advisory services to its US-registered funds. The insurer has thus agreed to move ~$120bn in assets to Voya Financial , an American Finance and insurance company in exchange for up to a 24% stake in the latter’s investment management arm.

Allianz’s USD 3.5% Perp was flat at 87.9, yielding 7.59%.

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