NEW YORK—A U.S. judge said Germany’s Allianz SE must face investor claims it wrongly “abandoned” the investment strategies it promised to use on hedge funds that suffered massive losses as the COVID-19 pandemic shook markets early last year. In an 81-page decision, U.S. District Judge Katherine Polk Failla in Manhattan said investors could try to show Allianz was negligent and lacked good faith in managing its Structured Alpha funds. She also dismissed some state law-based claims. Thursday’s decision addressed 12 lawsuits, including two proposed class actions, in which investors claimed to suffer more than $4 billion of losses. The insurer faces more than two dozen such lawsuits, seeking at least $6 billion. Allianz’s funds used complex option strategies to generate predictable returns without excessive risk, but according to the investors, imploded in February and March 2020 after quietly removing hedges designed to minimize losses. According to court papers, the Structured …
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