“Because of fraud”... an American insurance company was fined $6 billion

The US insurance giant, Allianz, will pay $6 billion in damages and fines for adopting a multibillion-dollar fraud scheme that harmed teachers, clergy and other American investors.

In the United States, Allianz Global Investors, a US unit of the German financial company, admitted violating US securities laws through its "Alpha Structure" scheme, AFP reported.

This structure dates back to at least January 2016 and was vulnerable to the March 2020 stock market crash, according to the US Securities and Exchange Commission.

The Securities and Exchange Commission said Allianz Global, along with two of the three portfolio managers named in the complaint, also agreed to plead guilty in a parallel criminal case.

The committee said Allianz and its three portfolio managers manipulated key financial figures to make losses appear smaller.

But when the pandemic reached the United States in March 2020, the market crash caused by the turmoil at the time showed that Allianz had misled investors about the risks, and “the fund it formed incurred huge losses and investors lost billions.”

The statement said that Allianz Global had agreed to pay about $1 billion in fines and other settlements, while the company and the German parent company would pay more than $5 billion in compensation to the victims.

"Victims of this misconduct include teachers, clergy, bus drivers and engineers, who invest their pensions in institutional funds to support their retirement," said committee chair Gary Gensler.

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