On March 14, 2024, U.S. District Court Judge Dale Fischer of the Central District of California dismissed all claims brought by a putative class of holders of ADRs against Allianz SE and Allianz Global Investors US (“AGI US”).
The complaint was filed after AGI US pled guilty to securities fraud based on three rogue portfolio managers’ misrepresentations to investors in AGI US’s Structured Alpha Funds, a set of private investment funds that collapsed during the COVD-19 market crash in March 2020, leading to billions in investor losses. It was later revealed that the three portfolio managers had not managed the Funds consistently with representations to investors about the Funds’ strategy and risk management. The plaintiff was not an investor in any Structured Alpha Fund or any AGI US securities, but instead purchased only ADRs priced by reference to Allianz SE common stock trading in Germany.
The court granted defendants’ motion to dismiss in its entirety for failure to state a claim. Regarding AGI US, Judge Fischer held the plaintiff “cannot point to misrepresentations concerning a security he did not invest in” to plead securities fraud in connection with the ADRs he actually purchased. Regarding Allianz SE, Judge Fischer held that the plaintiff had not established that Allianz’s statements about its internal risk management controls were false, noting that such statements “are not automatically rendered false by the subsequent discovery of corporate mismanagement that circumvented those controls.”
Although the court granted the plaintiff leave to amend the complaint, it cautioned that the plaintiff “should carefully consider the other issues raised by the defendants’ motion.” Those issues include failure to plead scienter and to confront the DOJ statement of facts accompanying the guilty plea, which made clear that Allianz SE had no knowledge of the Structured Alpha fraud, and that only the three rogue portfolio managers at AGI US had such knowledge.
The S&C team includes Robert Giuffra Jr., William Torchiana, Adam Paris, Hilary Williams, Jacob Cohen, Emily Grasso, Cam Molis and Steph Haenn.
