UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 95293 / July 15, 2022

ADMINISTRATIVE PROCEEDING

File No. 3-20855

In the Matter of

Allianz Global Investors U.S. LLC,

Respondent.

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EXTENSION ORDER

The Division of Enforcement (“Division”) has requested an extension of time until May 

31, 2023 to submit a Proposed Plan of Distribution under Rule 1101(a) of the Commission’s 

Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1101(a).

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 “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 

 

1

 Exchange Act Rel. No. 94927 (May 17, 2022).
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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 $349.2 million 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”).
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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 monies paid to the 

Commission have been deposited in an interest-bearing account at the U.S. Department of the 

Treasury’s Bureau of the Fiscal Service, and any accrued interest will be for the benefit of the 

Fair Fund.

In its request for an extension of time, the Division states that additional time is needed to 

complete the fund administrator solicitation and appointment process, develop the distribution 

methodology, and prepare the proposed plan of distribution.

Accordingly, for good cause shown, IT IS HEREBY ORDERED that the Division’s 

request for an extension of time until May 31, 2023 to submit a Proposed Plan of Distribution is 

granted. 

For the Commission, by the Division of Enforcement, pursuant to delegated authority.2

Vanessa A. Countryman

Secretary 

 

2

 17 C.F.R. § 200.30-4(a)(21)(i).