Reported by Dylan Tokar

Allianz last year agreed to pay about $6 billion to resolved its own liability for the market meltdown. PHOTO: BENJAMIN GIRETTE/BLOOMBERG NEWS

A federal judge in New York declined to throw out fraud charges against a former Allianzfund manager who claimed he was double-crossed by his lawyers, citing the terms of a joint defense agreement the executive entered into with the firm’s counsel.

The ruling by Judge Laura Taylor Swain allows federal prosecutors to forge ahead with their prosecution of Gregoire Tournant, a former chief investment officer for one of Allianz’s U.S. investing divisions who was blamed by the firm for losses it suffered during a market meltdown in 2020 sparked by the Covid-19 pandemic.

After being arrested last year and charged with securities and investment adviser fraud, Tournant in January launched his first attack against the government’s case, arguing that prosecutors had encouraged lawyers who were acting for both Allianz and for him personally to use his privileged communications to help build a false narrative against him.

The Munich-based financial services company last year agreed to pay about $6 billion in penalties and restitution to investors in a settlement with prosecutors that resolved its own liability for the market meltdown. The firm admitted to having deficient internal controls but said criminal misconduct was limited to a handful of former employees.

The ruling is one of several recent court actions pushing back on claims by executives that the way their employers handled internal investigations into allegations of white-collar misconduct violated their due-process rights.

Read full report: https://www.wsj.com/articles/former-allianz-executive-loses-bid-to-toss-fraud-charges-da745b5