Allianz Global Investors U.S. to pay $1B to settle SEC charges over options strategy

Allianz Global Investors U.S., part of Allianz SE (OTCPK:ALIZF), has agreed to pay more than $1B to resolve charges that the unit and three former senior portfolio managers hid the downside risks of a complex options trading strategy they called "Structured Alpha," the U.S. Securities and Exchange Commission said in a statement Tuesday.
The investment firm took a $4B charge tied to the collapse of AllianzGI U.S. Structured Alpha funds, the company disclosed in February.
"Allianz Global Investors (OTCPK:ALIZF) admitted to defrauding investors over multiple years, concealing losses and downside risks of a complex strategy, and failing to implement key risk controls," SEC Chair Gary Gensler said. "The victims of this misconduct include teachers, clergy, bus drivers, and engineers, whose pensions are invested in institutional funds to support their retirement."
Because of the guilty plea, AGI US is automatically disqualified from providing advisory services to U.S. registered investment funds for the next 10 years and will exit the business of conducting those fund services, the SEC said. Note that on Tuesday Voya Financial (VOYA) entered an MOU to acquire the majority of Allianz Global Investors' (OTCPK:ALIZF) U.S. investment teams and AUM for up to a 24% stake in Voya Investment Management.