Former Allianz Fund Manager Pleads Guilty to Defrauding Investors
Gregoire Tournant, the former chief investment officer at Allianz Global Investors U.S., pleaded guilty to two counts of investment adviser fraud
A former Allianz fund manager who ran the investment group responsible for steep losses the firm suffered during the 2020 market meltdown sparked by the Covid-19 pandemic pleaded guilty to fraud charges.
Gregoire Tournant, the former chief investment officer at Allianz Global Investors U.S., pleaded guilty Friday before Judge Laura Taylor Swain in the U.S. District Court for the Southern District of New York to two counts of investment adviser fraud. He also agreed to forfeit about $17 million as part of his plea. He faces up to 10 years in prison and will be sentenced on Oct. 16.
Tournant, 57, of Basalt, Colo., has faced conspiracy, securities fraud, investment adviser fraud and obstruction of justice charges since 2022.
Prosecutors in Manhattan alleged that the set of Allianz Global Investors’ private funds co-managed by Tournant suffered losses of more than $7 billion during the March 2020 market selloff. The funds were eventually shut down.
Tournant and his co-conspirators allegedly also misled investors, largely institutional investors such as large pension funds, by marketing the funds as protected from a sudden market crash with particular hedges. He also touted the protections the funds received within Allianz, one of the world’s largest financial and insurance companies.
Attorneys for Tournant and a spokeswoman for the federal prosecutors’ office in the Southern District of New York declined to comment.
Based on the findings the firm shared with U.S. authorities, the case against Tournant appeared strong, said a person with knowledge of Allianz’s thinking, adding that the firm is pleased that Tournant is “finally taking ownership for the deception he led.”
Friday’s guilty plea capped a contentious proceeding with Tournant as part of the investigation into one of the biggest early casualties of the stock market crash caused by the coronavirus. Investors, including pensions that managed the retirement plans of Arkansas teachers, Milwaukee city employees and New York City subway workers, lost billions on the funds.
Tournant last year accused federal prosecutors in the case of committing ethical breaches by turning his own lawyers against him. He said prosecutors encouraged lawyers that were acting both for the firm and for him personally to later switch sides and use his privileged communications to help build a false narrative against him. Judge Swain in August declined his request to throw out fraud charges against him, citing the terms of a joint defense agreement the executive entered into with the firm’s counsel.
Allianz Global Investors U.S. in May 2022 pleaded guilty to securities fraud and agreed to pay about $6 billion in penalties and restitution to investors of the funds, known as Structured Alpha funds. The firm also admitted it lacked internal controls and oversight for a series of private-investment funds and made false and misleading statements to investors, according to a plea agreement reached with the U.S. attorney’s office in Manhattan.
Two former Allianz Global Investors U.S. employees also pleaded guilty in March 2022 in connection with the scheme, according to the Justice Department.