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Allianz Fund Manager’s Lawyer Says US Got Privileged Information in Fraud Case

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Erik Larson
·2 min read
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  • ALIZF

(Bloomberg) -- A former Allianz SE hedge fund manager who was charged with fraud over billions of dollars in investor losses thinks US prosecutors may have used his former lawyer to gain improper access to privileged information -- something that can sink a criminal case, if true.

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Gregoire Tournant, who was chief investment officer and co-lead portfolio manager of a group of Allianz hedge funds that collapsed during pandemic market gyrations, pleaded not guilty Thursday in New York to five criminal charges, including securities fraud and conspiracy to obstruct justice. He’s accused of misleading investors who were seeking low-risk assets.

During the court hearing, Tournant’s lawyer, Seth Levine, hinted at his client’s defense by arguing that investigators had turned Tournant’s previous lawyer into a “government informant,” allowing them to gain access to materials protected by attorney client privilege. Such a move violates “bedrock” legal principles, he said.

Levine asked US District Judge Laura Taylor Swain to order the government to immediately tell the defense what materials it got from the former lawyer, when they were handed over and who at the Justice Department would have seen them. Swain denied the motion after the prosecution said it planned to give the information to the defense soon anyway.

Tournant’s former lawyer is a partner at Sullivan & Cromwell LLP, which is also the law firm for Allianz and is representing the company in the case. The law firm’s media representative didn’t immediately respond to a message seeking comment, and neither did the Justice Department.

Read More: Allianz Fund Collapse Ends in Guilty Plea, $5.8 Billion Deal

The judge also approved details of a bail package agreed to by Tournant and the government, including a $20 million personal recognizance bond signed by three individuals vetted by the government and secured by five properties in Colorado and Tournant’s retirement account.

The plea by Tournant, a 55-year-old equity-options whiz and onetime McKinsey & Co. consultant, comes less than a month after a unit of Allianz pleaded guilty to fraud and agreed to pay $5.8 billion after misrepresenting the risk posed by the collapsed funds.

Tournant, a dual US-French citizen who was arrested in Colorado last month, spoke quietly during Thursday’s hearing as he confirmed that he understood the charges and rejected them.

Lawyers for Tournant have called the case against him a “meritless and ill-considered attempt by the government to criminalize the impact of the unprecedented, COVID-induced market dislocation of March 2020.”

The case is US v. Tournant, 22-cr-00276, U.S. District Court, Southern District of New York (Manhattan)

(Updates with details about case.)

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