UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 99494 / February 8, 2024

ADMINISTRATIVE PROCEEDING

File No. 3-20855

In the Matter of

Allianz Global Investors U.S. LLC,

Respondent.

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ORDER APPROVING AMENDED

PLAN OF DISTRIBUTION

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”)1against 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 

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 

1

 Exchange Act Rel. No. 94927 (May 17, 2022).
2

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.

On December 28, 2023, the Commission published a Notice of Amended Proposed Plan 

of Distribution and Opportunity for Comment (“Notice”),2pursuant to Rule 1103 of the 

Commission’s Rules on Fair Fund and Disgorgement Plans (“Commission’s Rules”);3and 

simultaneously posted the Amended Proposed Plan of Distribution (the “Amended Proposed 

Plan”). The Notice advised interested persons that they could obtain a copy of the Amended 

Proposed Plan from the Commission’s public website or by submitting a written request to Amy 

Sumner, United States Securities and Exchange Commission, Byron Rogers Federal Office 

Building, 1961 Stout Street, Suite 1700, Denver, CO 80294-1961. The Notice also advised that 

all persons desiring to comment on the Amended Proposed Plan could submit their comments, in 

writing, within 30 days of the Notice. The Commission received no comments on the Amended 

Proposed Plan during the comment period. 

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

Fund4to distribution of the Net Available Fair Fund 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 in the Plan.

The Division of Enforcement now requests that the Commission approve the Amended 

Proposed Plan.

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s Rules,5

that the Amended Proposed Plan is approved, and the approved Amended Plan of Distribution 

shall be posted simultaneously with this order on the Commission’s website at www.sec.gov.

By the Commission.

Vanessa A. Countryman

Secretary 

2

 Exchange Act Rel. No. 99253 (Dec. 28, 2023).

3

 17 C.F.R. § 201.1103.

4

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

Proposed Plan.

5

 17 C.F.R. § 201.1104.