The German insurance firm Allianz will pay more than $6 billion and its investment subsidiary agreed to plead guilty to a securities fraud charge over the implosion of a group of hedge funds that wiped out the investments of public pensions, religious organizations, foundations and other investors.

The investment advisory firm at Allianz that had managed the hedge funds failed to stop a fraud scheme that came to light after the funds collapsed early in the pandemic, according to court filings provided by federal prosecutors on Tuesday.

Prosecutors said three former Allianz portfolio managers, including the funds’ former chief investment officer, misled the funds’ investors by concealing the risk they faced. The former executive, Gregoire Tournant, was also accused of trying to conceal the scheme: He was indicted on a series of criminal charges including conspiracy, securities fraud and obstruction of justice.

The two other portfolio managers, Stephen Bond-Nelson and Trevor Taylor, agreed in February to plead guilty to charges including securities fraud, according to court documents unsealed Tuesday.

As a result of its guilty plea, Allianz said it would no longer be permitted to advise certain kinds of funds in the United States, and it simultaneously announced that had reached a preliminary deal to transfer management of approximately $120 billion in assets to a new partner. Allianz said it was in talks with Voya Financial, a New York-based firm, and an agreement would be finalized in the coming weeks.

The investigation centered on the firm’s Structured Alpha Funds, which lost about $7 billion at the start of the Covid-19 pandemic as stocks suffered severe losses.

But the seeds of that destruction were planted years earlier, authorities said. Investigators said Allianz officials had misled investors about the funds’ risk level and had altered documents to make the funds look safer than they were.

Federal prosecutors and the Securities and Exchange Commission began investigating after the funds fell apart, and Allianz has been telling investors for months that it had been setting aside billions of dollars to resolve the matter.

Allianz agreed to pay more than $5 billion in restitution to investors and more than $1 billion to the government to resolve the S.E.C. inquiry, the regulator said.

The indictment against Mr. Tournant said he had sought to obstruct the S.E.C. investigation and had repeatedly instructed one of the former portfolio managers to lie to investigators.

Mr. Tournant, 55, voluntarily surrendered to authorities in Denver on Tuesday morning, according to a spokesman for Damian Williams, U.S. attorney for the Southern District of New York. A lawyer for Mr. Tournant, Dan Alonso, could not immediately be reached for comment.

In a statement, Allianz said the misconduct was “limited to a handful of individuals” who were no longer employed by the company.

Representatives of the firm were expected to appear in federal court to enter the guilty plea for its investment arm. Mr. Bond-Nelson and Mr. Taylor, the portfolio managers who agreed to plead guilty for their role in the scheme, also agreed to settle with the S.E.C.

“Allianz Global Investors admitted to defrauding investors over multiple years, concealing losses and downside risks of a complex strategy, and failing to implement key risk controls,” said the S.E.C. chairman, Gary Gensler. “The victims of this misconduct include teachers, clergy, bus drivers and engineers, whose pensions are invested in institutional funds to support their retirement.”

The misrepresentations to investors began as far back as 2016, according to investigators. That helped the firm generate $400 million in net profits from managing the funds and large bonuses for the former portfolio managers.

A statement of facts, which is part of the plea documents by Allianz’s investment firm, said the firm “made false and misleading statements to current and prospective investors that substantially understated the risks being taken by the funds, and also overstated the level of independent risk oversight over the funds.”

A pitchbook prepared for investors misrepresented steps the fund had taken to hedge its investments against losses, authorities said. The portfolio managers also “smoothed” the returns generated by the funds to make their performance look more predictable.

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