Knox County Pension & Retirement Board, Knoxville, Tenn., and other shareholders in mutual funds managed by Allianz Global Investors reached a $145 million settlement with the manager in a consolidated class-action securities fraud lawsuit related to losses incurred by those funds, a court filing Tuesday showed.
The lawsuit had been filed in New York Supreme Court “on behalf of individuals who purchased, sold, or liquidated mutual funds shares managed by AllianzGI’s Structured Products Group,” according to the original complaint.
The lawsuit filed in May was the result of AllianzGI pleading guilty to Securities and Exchange Commission charges regarding the management of its Structured Alpha strategies.
The SEC had charged that AllianzGI had abandoned its investment and risk management strategies in the management of its Structured Alpha strategies, which subjected investors to "undisclosed risk and ultimately led to the massive losses the funds incurred in February and March of 2020" when the emergence of the COVID-19 pandemic roiled the markets.
On May 17, AllianzGI pleaded guilty to the Securities and Exchange Commission charges and agreed to pay more than $6 billion in restitution, which also automatically and immediately disqualified from AllianzGI from providing advisory services to U.S.-registered investment funds for the next 10 years. Immediately afterward, AllianzGI announced plans to sell its U.S. investment management business to Voya Financial.
According to the original complaint, the lawsuit “holds Allianz responsible for similarly harming retail investors in certain Allianz-managed mutual funds, and provides a significant recovery to these investors.”
AllianzGI spokesman John Wallace could not be immediately reached for comment.