Pursuant to the DOJ resolution, AGI U.S. will plead guilty to one count of criminal securities fraud, and the SEC resolution establishes that AGI U.S. violated relevant U.S. securities laws. These settlements fully resolve the U.S. governmental investigations of the Structured Alpha matter for Allianz.
The Statement of Facts accompanying the DOJ resolution states that the criminal misconduct regarding the Structured Alpha funds was limited to a handful of individuals in the Structured Products Group of AGI U.S. who are no longer employed by the company, and that the DOJ’s investigation did not otherwise find any knowledge of, or participation in, the misconduct at Allianz SE or any other entity of the Allianz Group.
The guilty plea will result in the disqualification of AGI U.S. from advising U.S. registered mutual funds and certain type of pension funds after expiry of a temporary relief period. Allianz expects the SEC to issue waivers later today that will ensure that AGI U.S.’s resolution with the DOJ does not impact PIMCO and Allianz Life’s business activities.
Allianz SE has signed a Memorandum of Understanding to enter into a long-term strategic partnership including a transition of AGI U.S.'s investment management activities with currently appr. USD 120 billion in assets under management in scope to a new partner in the U.S. The transferred activities do not include any part of the Structured Products Group, which has previously been dissolved. As consideration for the transfer, Allianz Global Investors would receive a stake in the enlarged entity and long-term, global, cross-distribution agreements. Execution of definitive agreements is targeted within the next weeks.
In connection with the settlements AGI U.S. will pay forfeiture of USD 174.3 million to the DOJ, and USD 675 million as a penalty to the SEC that may be used in some part as compensation for investors. Other monetary obligations addressed by the DOJ and the SEC have been or will be satisfied by the approximately USD 5 billion in compensation paid to Structured Alpha investors. Any such amounts payable and the USD 5 billion of compensation have already been reflected in the provisions set for 2021 and Q1 2022.