THE PORTFOLIO manager behind Allianz' Structured Alpha funds faces decades in prison after he traded off Allianz' good reputation to defraud investors of billions, US prosecutors have said.

French-American citizen Gregoire Tournant earned $60m from his role at Allianz, as he lied to investors and misled them as to the risk of investing in the Structured Alpha funds.

The 55-year-old investment manager now faces up to 40 years in prison on five separate counts of fraud and conspiracy to obstruct justice.

The New York prosecutors also said Allianz failed to keep watch over Tournant as they claimed the firm was "asleep on the beat" while Tournant and his co-conspirators lined their own pockets by misleading pension funds.

The comments come after Allianz's $11bn Structured Alpha funds racked up $6bn in losses at the start of the pandemic, as their risky options strategy faltered in the face of stock market volatility at the start of Covid-19.

(c) 2022 City A.M., source Newspaper