Gregoire Tournant, a former Allianz fund manager, has admitted his involvement in the collapse of private investment funds during the pandemic, leading to an estimated $7 billion in investor losses.Â
The 57-year-old from Basalt, Colorado, pleaded guilty to two counts of investment adviser fraud before Chief Judge Laura Taylor Swain in the federal court in Manhattan.Â
Tournant faces up to 10 years in prison at his sentencing on October 16.
He also agreed to forfeit $17.5 million in illicit gains, including inflated bonuses from his fraudulent activities.
The case revolves around the collapse of Allianz’s now-defunct Structured Alpha funds, which Tournant had created and managed as chief investment officer, in 2020.
The funds are designed to mitigate losses during market selloffs through heavy betting on stock options.
They failed spectacularly at the pandemic’s onset, causing significant investor losses.
In May 2022, Allianz agreed to pay over $6 billion.
Its US asset management unit pleaded guilty to securities fraud to settle government investigations into the fund’s collapse.Â
Two other former Allianz fund managers also pleaded guilty at that time.
Prosecutors revealed Tournant misled investors about the risks of the funds by falsifying performance data and deviating from the promised hedging strategy.Â
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He further obstructed a US Securities and Exchange Commission investigation by instructing a colleague to lie.
The Structured Alpha funds once managed over $11 billion in assets but lost about $7 billion during the market panic triggered by the pandemic in February and March 2020.
Before his guilty plea, Tournant confessed to providing deceptive information to investors, acknowledging his wrongdoing.
According to prosecutors, Tournant’s fraudulent conduct earned him over $60 million from 2014 through March 2020.
