By Luc Cohen
NEW YORK – A former Allianz fund supervisor was spared jail time on Friday over his function in a meltdown of personal funding funds sparked by the COVID-19 pandemic that brought on an estimated $7 billion of investor losses.
Gregoire Tournant, 57, of Basalt, Colorado, pleaded responsible in June to 2 counts of funding adviser fraud. He agreed to surrender $17.5 million in ill-gotten features, together with bonuses that have been inflated by his fraud.
Chief Decide Laura Taylor Swain of the federal courtroom in Manhattan sentenced him to 18 months dwelling confinement and three years probation.
Tournant’s protection legal professionals had urged Swain to spare him jail time, citing well being points. Additionally they mentioned Tournant had expressed regret, and known as the case much less severe than the standard funding adviser fraud scheme.
“We’re deeply appreciative to the Court docket for imposing this simply sentence and recognizing that incarceration was not applicable on this case,” protection legal professionals Seth Levine and Daniel Alonso mentioned in an announcement.
Prosecutors with the U.S. Lawyer’s workplace in Manhattan had beneficial that Tournant be sentenced to no less than seven years in jail. They argued that greater than 100 buyers in Tournant’s funds misplaced billions of {dollars} once they collapsed, and that he continued to attenuate the significance of what he had carried out.
The case stemmed from the March 2020 collapse of the German insurer’s now-defunct Structured Alpha funds, which Tournant had created and oversaw as chief funding officer.
In Might 2022, Allianz agreed to pay greater than $6 billion and its U.S. asset administration unit pleaded responsible to securities fraud to resolve authorities probes into the collapse. Two different former Allianz fund managers pleaded responsible on the time.
The Structured Alpha funds had wager closely on inventory choices, in a way designed to restrict losses in a market selloff, which Tournant likened to a type of insurance coverage.
Prosecutors mentioned Tournant misled buyers in regards to the funds’ dangers by altering efficiency knowledge and diverging from his promised hedging technique, and obstructed a U.S. Securities and Alternate Fee probe by directing a colleague to lie.
The funds as soon as had greater than $11 billion of belongings below administration, however misplaced about $7 billion in February and March 2020 as the beginning of the pandemic set off a worldwide market panic.
Prosecutors mentioned the fraud ran from 2014 by means of March 2020, with Tournant being paid greater than $60 million over that point.
(Reporting by Luc Cohen in New York; Enhancing by Invoice Berkrot)
