Allianz Takes $4.2 Billion Charge Over Collapsed Hedge Fund Debacle

2021 was a bad year for hedge funds, but few were hit as hard as insurance giant Allianz SE, which today announced it would take a €3.7 billion ($4.2 billion) charge tied to the implosion of some of its U.S. hedge funds.

The provision will hit last year’s net income by €2.8 billion, the company said in a statement late Thursday. And while the insurer expects to settle with major investors in the funds shortly, bringing some clarity to months of uncertainty on the legal bill for the matter, discussions with other plaintiffs, the U.S. Department of Justice and the U.S. Securities and Exchange Commission are ongoing. The company also warned that it can’t reliably estimate the total financial impact of the legal matter and expects additional expenses.

Some background: the Allianz hedge fund investment strategy, known as Structured Alpha, 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.

What is remarkable is that the hedge funds offered by the AGI unit were designed to provide protection against a market crash. Instead, two of the Structured Alpha Funds were liquidated at the end of March 2020 after suffering massive losses, and Allianz has since wound down the rest.

According to court papers, the Structured Alpha Global Equity 500 fund lost three-quarters of its value, lagging its benchmark by nearly 60 percentage points. Two other funds once worth $2.3 billion were liquidated, locking in investor losses.

The collapse sparked a frenzy of lawsuits by investors alleging losses of some $6 billion, as well as an investigation by the Securities and Exchange Commission.

Back in August, Allianz warned that the hedge funds implosion could “materially impact” future earnings, after the U.S. Department of Justice started a probe into the funds. Then, in September, a U.S. judge said Allianz 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.

It wasn't all bad though: Allianz said operating profit rose 25% to 13.4 billion euros last year, and the company announced a plan to buy back as much as 1 billion euros of its own shares. Indeed, as Bloomberg notes, the hedge fund debacle "overshadowed a strong rebound at Allianz from the impact of the pandemic, with higher prices and an economic recovery fueling underlying earnings."

https://www.zerohedge.com/markets/allianz-takes-42-billion-charge-over-collapsed-hedge-fund-debacle

Tom Fitton: Judicial Watch Settles North Carolina Voter Roll Lawsuit After State Removes Over 430,000 Inactive Names From Rolls

Another huge win for Judicial Watch.

Conservative watchdog group Judicial Watch on Thursday announced it settled its lawsuit against North Carolina after it removed over 430,000 inactive names from voter rolls.

Recall, Judicial Watch successfully sued California, Kentucky, Ohio and Indiana and forced them to clean up their dirty voter rolls.

Judicial Watch reported:

(Washington, DC) – Judicial Watch announced today that it is settling its lawsuit against North Carolina and two of its counties after they removed over 430,000 ineligible names from the voter rolls.

In June 2019, the U.S. Election Assistance Commission (EAC) released data showing that voter registration rates in a significant proportion of North Carolina’s 100 counties were close to, at or above 100% of their age-eligible citizenry – statistics considered by the courts to be a strong indication that a jurisdiction is not taking the steps required by law to remove ineligible registrants. Judicial Watch’s analysis also showed that at the time of the EAC report the entire State of North Carolina had a registration rate close to 100% of its age-eligible citizenry.

In the settlement, Judicial Watch told the court:

[T]he total number of inactive registrations reported by North Carolina dropped from about 1.2 million in 2019, to about 765,000 in 2021 (a 36% drop). The statewide percentage of inactive registrations dropped from 17% in 2019, which the complaint alleged to be a national outlier, to 10% in 2021, which is close to the median state inactive rate. The number of registrations removed for failure to respond to an address confirmation notice and vote in two consecutive elections has increased, from about 220,000 for the period reported in 2019, to about 590,000 for the period reported in 2021 (a 168% increase).

With respect to the two North Carolina counties, Judicial told the court:

Data for Mecklenburg County and Guilford County also showed improvement. From 2019 to 2021, the percentage of inactive registrations reported in Mecklenburg County dropped from 15.5% to 13%, and in Guilford County from 19% to 11%. The number of registrations removed for failure to respond to an address confirmation notice and vote in two elections increased during that same period, from roughly 21,000 to 51,000 in Mecklenburg County, and from 7,000 to 33,000 in Guilford County (a 142% and 372% increase, respectively). In light of Defendants’ substantial increases in removals of ineligible voters since this suit commenced, Plaintiff has determined in good faith that this legal action should not be pursued.

Judicial Watch president Tom Fitton said there are ongoing lawsuits in Colorado and Pennsylvania and he is prepping more lawsuits against other states.

“Dirty voter rolls can mean dirty elections,” Fitton said.

“This is a win for the voters of North Carolina – because clean voter rolls help pave the way to cleaner elections,” said Judicial Watch President Tom Fitton. “After we filed our federal lawsuit, North Carolina removed hundreds of thousands ineligible voters (people who have died or moved away). North Carolina follows Judicial Watch voter roll clean-up successes in California, Kentucky, Ohio, and Indiana. And we are right now prepping lawsuits against other states to force them to clean up their rolls.”

https://www.thegatewaypundit.com/2022/02/tom-fitton-judicial-watch-settles-north-carolina-voter-roll-lawsuit-state-removes-430000-inactive-names-rolls/