UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 99253 / December 28, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-20855

In the Matter of

Allianz Global Investors U.S. LLC,

Respondent.

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NOTICE OF AMENDED PROPOSED 

PLAN OF DISTRIBUTION AND 

OPPORTUNITY FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and 

Exchange Commission’s (the “Commission”) Rules on Fair Fund and Disgorgement Plans (the 

“Commission’s Rules”), 17 C.F.R. § 201.1103, that in response to certain comments received on 

the Proposed Plan of Distribution (“Proposed Plan”) published on May 22, 2023,

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the Division of 

Enforcement (the “Division”) has submitted to the Commission an amended proposed plan of 

distribution (the “Amended Proposed Plan”) for the distribution of monies paid in the abovecaptioned matter. The Proposed Plan has been modified to expand the list of eligible Securities2

and to revise the Plan of Allocation to adopt a “rising tide” methodology rather than a “pro rata” 

methodology.3 

On May 17, 2022, the Commission issued an Order Instituting Administrative and Ceaseand-Desist Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 

1934 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, 

and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Order”)4against Allianz 

Global Investors U.S. LLC (“AGI US” or the “Respondent”). In the Order, the Commission 

found that AGI US employed a complex options trading strategy known as Structured Alpha that 

AGI US marketed and sold to investors in various funds (“Structured Alpha Funds”). The 

Structured Alpha Funds were intended to generate profits by using a portfolio of debt or equity 

1 Exchange Act Rel. No. 97540 (May 22, 2023).

2 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Amended 

Proposed Plan.

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In response to other comments received, the Amended Proposed Plan submitted by the Division has not been 

modified. In response to one comment received, current distribution procedures are sufficient to address the 

concerns raised regarding disposition of the Residual and the confidentiality of information submitted by claimants. 

In response to another comment received, provisions as initially proposed relating to the sale or transfer of an 

investor claim and the payment of third-party filers are fair and reasonable.

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 Exchange Act Rel. No. 94927 (May 17, 2022).
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securities as collateral to purchase and sell options principally on the S&P 500 Index. The 

Structured Alpha Funds performed well until the COVID-related market volatility in March 2020 

when they suffered catastrophic losses, including losses in excess of 90% in certain funds. 

Beginning on or before January 2016, and continuing through March 2020, AGI US, through the 

Structured Alpha portfolio management team, misled investors as to the significant downside 

risk of the Structured Alpha Funds, which included misrepresentations and omissions made in 

connection with the purchase and sale of these securities. First, AGI US’s marketing materials 

misrepresented to investors the levels at which hedging positions were put in place. Second, the 

portfolio management team did not consistently implement a bespoke risk mitigation program 

agreed to with the largest client in the Structured Alpha Funds. Third, the portfolio management 

team manipulated reports and other information provided to or created for certain investors on an 

ad hoc basis to conceal the magnitude of the strategy’s downside risk. In addition, the portfolio 

management team misrepresented to investors that Structured Alpha had a capacity limit of $9 

billion for certain funds when, in reality, it exceeded that amount by over $3 billion. After 

COVID-related market volatility in March 2020, the portfolio management team engaged in 

numerous, ultimately unsuccessful, efforts to conceal their misconduct from the Commission 

staff. The Commission ordered the Respondent to pay $349,200,000 in disgorgement and 

prejudgment interest, which was deemed satisfied by forfeiture and restitution ordered in 

settlement of a parallel criminal proceeding. The Commission further ordered the Respondent to 

pay a $675,000,000.00 civil money penalty and created a Fair Fund, pursuant to Section 308(a) 

of the Sarbanes-Oxley Act of 2002, so the penalty paid can be distributed to harmed investors 

(the “Fair Fund”). In accordance with the Order, the Respondent paid $131,314,739.08 directly 

to certain investors and the remaining $543,685,260.92 to the Commission.

The Fair Fund includes the $543,685,260.92 paid by the Respondent. The assets of the 

Fair Fund are subject to the continuing jurisdiction and control of the Commission. The Fair 

Fund has been deposited in a Commission-designated account at the U.S. Department of the 

Treasury, and any interest accrued will be added to the Fair Fund.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of 

the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm. 

Interested persons may also obtain a written copy of the Amended Proposed Plan by submitting a 

written request to Amy A. Sumner, United States Securities and Exchange Commission, Byron 

Rogers Federal Office Building, 1961 Stout Street, Suite 1700, Denver, CO 80294-1961. All 

persons who desire to comment on the Amended Proposed Plan may submit their comments, in 

writing, no later than thirty (30) days from the date of this Notice:

1. to the Office of the Secretary, United States Securities and Exchange 

Commission, 100 F Street, NE, Washington, DC 20549-1090;

2. by using the Commission’s Internet comment form 

(http://www.sec.gov/litigation/admin.shtml); or

3. by sending an e-mail to rule-comments@sec.gov.
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Comments submitted by email or via the Commission’s website should include “Administrative 

Proceeding File No. 3-20855” in the subject line. Comments received will be publicly available. 

Persons should submit only information they wish to make publicly available.

THE AMENDED PROPOSED PLAN

The Amended Proposed Plan provides for the distribution of the Net Available Fair Fund, 

comprised of the $543,685,260.92 in civil money penalties paid by the Respondent, plus interest 

and income earned thereon, less taxes, fees, and expenses, to investors who held eligible 

Securities during the Relevant Period and suffered a Recognized Loss as calculated by the 

methodology used in the Plan of Allocation attached as Exhibit A to the Plan. 

The Amended Proposed Plan has been modified to expand the list of Securities eligible to 

participate in the distribution of the Fair Fund, and allows for it to be expanded further based on 

information received during the claims process.

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 The Plan of Allocation has also been modified 

to adopt a “rising tide” methodology that accounts for Prior Recoveries. The Amended Proposed 

Plan further includes some modifications to clarify the documentation that may be required for

the Fund Administrator to calculate Recognized Loss and provide internal consistency.

In response to other comments received, the Amended Proposed Plan has not been 

modified. In response to one comment received, current distribution procedures are sufficient to 

address the concerns raised regarding disposition of the Residual and the confidentiality of 

information submitted by claimants. In response to another comment received, provisions as 

initially proposed relating to the sale or transfer of an investor claim and the payment of thirdparty filers are fair and reasonable. 

By the Commission.

Vanessa A. Countryman

Secretary 

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 The Amended Proposed Plan allows claims to be submitted for investment product(s) not included on the list of 

known Securities (Table A of the Plan of Allocation) provided that the investor can demonstrate that AGI US 

employed the Structured Alpha trading strategy on those investment products during the Relevant Period. The Fund 

Administrator, in consultation with the Commission staff, will determine whether such investment products are 

Securities for purposes of the Amended Proposed Plan.