The United States imposes heavy fines on Allianz – allegations of fraud – Economy

In the spring of 2020, major Allianz clients in the United States filed lawsuits worth billions of dollars due to significant losses in funds. According to the US authorities, the employees of Asset Management in the United States acted criminally.

The US government is imposing a stiff fine on Allianz after financial losses amounting to billions of dollars due to fraud allegations.

The Munich-based group must pay a fine of at least three million, and Allianz Global Investors, the responsible asset manager, is no longer allowed to continue its business in the United States in the previous form.

For this reason, US-based AGI will transfer its business there with about $120 billion in customer funds to a “new US partner,” Allianz announced in Munich on Tuesday.

According to the Securities and Exchange Commission, major US investors lost five billion dollars in AGI funds in March 2020 and then filed billions of dollars in lawsuits against Allianz. The Securities and Exchange Commission has announced that it will hold Allianz’s AGI-owned asset manager and three indicted managers responsible for a “massive fraud scheme.”

The US Department of Justice raised parallel allegations: Deputy Attorney General Lisa Monaco spoke of “a complex scheme on Wall Street that costs victims billions of dollars.”

How much is the fine?

And there was confusion about the amount of the fine: The Department of Justice set a fine of $2.3 billion in its statement. The Securities and Exchange Commission also stated that Allianz was paying more than $1 billion to the authority to clear the allegations. On the other hand, Allianz himself spoke of a fine of $675 million to the Securities and Exchange Commission, and another $174.3 million that went to the US Department of Justice as “profit theft.” According to Allianz, these amounts are net payments.

According to the company, the sanctions imposed on the US authorities will not entail any additional financial burden on the DAX group. Because Allianz has already allocated 5.6 billion euros, mostly for comparisons with injured investors. According to the Department of Justice, this includes many pension discoveries, including for bus drivers and New York subway employees as well as for educators in Arkansas.

Apparently deliberate deception

The Securities and Exchange Commission assumes that the three accused managers deceived both 114 good clients and the supervisory authority over a number of years about the true risks of so-called structured alpha funds. In its statement, the head office in Munich admitted criminal misconduct by the few AGI employees who are no longer employed by the group. According to US authorities, the three directors pleaded guilty.

Customers sued AGI 2020. Initially the company denied the allegations. But US authorities classify the losses as a criminal case.

Allianz is one of the world’s largest asset managers, with clients entrusting nearly €2 trillion to its subsidiaries AGI and Pimco. AGI is the smaller of the two companies, while US company Pimco is much larger, although it has not been implicated in the losses or in the ensuing legal disputes. He left the alliance open to who should be AGI’s new US partner. AGI will acquire a stake in the new unit, and there will also be mutual cooperation in international sales.