Prosecutors File Raps vs NYC Investment Adviser For $5B Fraud
Bus drivers, subway conductors, and religious groups nationwide lost over $5 billion when a COVID-induced stock market collapse crushed private investment funds linked to a financial industry giant, exposing massive fraud, authorities said Tuesday), Larry Neumeister reported for the Associated Press (AP).
Photo Insert: Allianz Global Investors (AGI) US LLC, a New York City-based investment adviser, failed to reveal to the SEC an “egregious, long-running and expensive fraud."
US Attorney Damian Williams said his office took the rare step of bringing criminal charges against Allianz Global Investors (AGI) US LLC, a New York City-based investment adviser, in part because the company failed to reveal an “egregious, long-running and expensive fraud” before the Securities and Exchange Commission (SEC) discovered it.
"Make sure you call us before we call you,” Williams told a news conference, vowing to remain “relentless in rooting out corruption in our financial markets.”
As part of a deal with prosecutors, Allianz Global Investors US LLC agreed to plead guilty Tuesday to its role in a fraud stretching from 2014 to 2020 and pay $3.2 billion in restitution, a $2.3 billion fine, and forfeit $463 million. Prosecutors called it one of the most significant corporate resolutions in history.
AGI US is an indirect, wholly-owned subsidiary of the Munich, Germany-based Allianz SE, one of the world’s largest financial services and insurance companies.
The prosecutor also announced conspiracy, securities fraud, and obstruction of justice charges against Gregoire Tournant, 55, of Basalt, Colorado, the former chief investment officer for a series of funds at AGI US that was once worth $11 billion.
Two other men blamed for the fraud have pleaded guilty and are cooperating, Williams said. Williams said Tournant and his co-conspirators lied to investors and secretly exposed them to substantial risk to illegally profit.