AllianzGI’s Structured Alpha strategies suffered catastrophic losses in early 2020. According to the filing, the board of trustees was invested in the AllianzGI Structured Alpha 1000 Plus and AllianzGI Structured Alpha U.S. Equity 250, and the portfolios, which make up nearly one-fifth of the retirement plans’ portfolios, lost 92% and 54%, respectively, of their values when the strategies collapsed.
An SEC investigation discovered what the agency called a “massive fraudulent scheme” perpetuated by the strategy’s three portfolio managers. AllianzGI agreed to pay more than $1 billion to settle the SEC charges and over $5 billion in restitution to investors who lost a total of $7 billion due to the collapse of Structured Alpha.
According to the court filing, the board filed suit against AllianzGI in November 2020, and Allianz settled the suit for $110 million in February, accounting for less than 45% of the plans’ losses in the investments.
Plaintiffs allege that because not all of the $250 million in losses have been recovered, they are seeking that the board and Callan “personally make good to the plans all losses incurred as a result of the breaches of fiduciary duties,” according to the filing.