Allianz ex-manager faces US fraud charges for $7 billion investor loss.
Allianz ex-manager faces US fraud charges for $7 billion investor loss.
Former Allianz Fund Manager’s Bid to Dismiss $7 Billion Fraud Case Rejected by U.S. Judge
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In a turn of events that may surprise many, former Allianz fund manager Gregoire Tournant’s attempt to dismiss a criminal fraud case against him has been rejected by a U.S. judge. The case revolves around Tournant’s role in causing investor losses totaling more than $7 billion. However, this development is just the beginning of a complex legal battle that has captivated the financial world.
The decision to reject the motion was made by U.S. District Judge Laura Taylor Swain, who denied Tournant’s bid to dismiss the five-count indictment, which includes a charge of obstruction. Notably, Tournant has pleaded not guilty. Swain has plans to release a redacted opinion outlining her reasoning behind the rejection in mid-August, unveiling the intricate details behind this high-profile case.
It’s worth mentioning that this ruling comes after another Manhattan federal judge approved Allianz’s groundbreaking settlement of $6 billion with U.S. authorities. This settlement involved a unit of the German insurer pleading guilty to a securities fraud criminal charge. The convergence of these two decisions provides a glimpse into the legal landscape surrounding this case.
Tournant, who was the creator and chief investment officer of Allianz’s now-defunct Structured Alpha Funds, finds himself at the center of the storm. Once boasting assets under management of over $11 billion, the funds incurred significant losses of approximately $7 billion as the COVID-19 pandemic disrupted markets in February and March of 2020. Prosecutors allege that Tournant intentionally concealed the funds’ risks, deceived Allianz’s in-house lawyers and the U.S. Securities and Exchange Commission, all while personally benefiting from approximately $60 million in pay.
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The legal battle has not been without its dramatic twists and turns. Tournant’s defense has raised concerns about the law firm Sullivan & Cromwell, which had initially represented both Tournant and Allianz but seemingly “switched sides” and made Tournant a scapegoat after the insurer decided to cooperate with prosecutors. Tournant argues that dismissing the indictment is warranted due to the prosecutors’ alleged intrusion into his attorney-client relationship, which he claims was “manifestly and avowedly corrupt.”
The U.S. Attorney’s office in Manhattan has swiftly dismissed Tournant’s claims as baseless, asserting that he is attempting to evade responsibility by shifting blame onto others. Two other former portfolio managers connected to the case have already pleaded guilty and agreed to cooperate with prosecutors, adding even more intrigue to this legal saga. Tournant’s trial date is set for February 5, 2024.
In conclusion, the rejection of Gregoire Tournant’s bid to dismiss the criminal fraud case against him has taken this ongoing legal battle to a new phase. Judge Laura Taylor Swain’s decision paves the way for a trial that is sure to capture widespread attention in the financial world. As the details of this case continue to unfold, it will be fascinating to witness how this high-stakes drama plays out in the coming months and what implications it may have for the financial industry at large.
References:
- Reuters
- U.S. v. Tournant, U.S. District Court, Southern District of New York, No. 22-cr-00276.
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