- Investor fits declare virtually $6 billion in losses
- Insurer warns of doable earnings impression
FRANKFURT, Aug 2 (Reuters) – Shares of Allianz declined 7% on Monday after the German insurer stated the U.S. Division of Justice had begun an investigation into losses at its fund administration division.
The DOJ investigation follows lawsuits by U.S. traders claiming near $6 billion in losses from the funds, saying Allianz did not safeguard their investments through the coronavirus market meltdown.
Allianz, in disclosing the DOJ investigation, warned of a “related danger” that the matter may “materially impression future monetary outcomes of Allianz Group,” with out offering an estimate.
In March 2020, Allianz was compelled to shutter two non-public hedge funds after extreme losses, prompting a wave of litigation from pension funds for truckers, academics and subway employees, with new fits filed as not too long ago as final month.
The fits allege that the Allianz World Buyers cash administration arm, in its Structured Alpha household of funds, strayed from a method of utilizing choices to guard towards a short-term monetary market crash.
Allianz disclosed final yr that the U.S. Securities and Alternate Fee was additionally investigating the matter. Allianz stated it was cooperating with each investigations.
“We consider that the potential prices or provisions related to the investigation could possibly be substantial and would possibly lead us to rethink our view of the group’s earnings or capitalization,” scores company S&P stated on Monday.
Shares of Allianz traded as little as 189.90 euros ($225.64) and have been down 7.2% at 195.06 euros per share at 1422 GMT.
A spokesman for Allianz World Buyers declined to remark. The DOJ did not instantly reply to a request for remark.
($1 = 0.8416 euros)
Reporting by Tom Sims and Alexander Huebner; Modifying by Douglas Busvine and Mike Harrison