Ex-Allianz Fund Manager Avoids Jail Over $3 Billion Collapse (1)

A former Allianz SE hedge-fund manager avoided prison and will instead spend 18 months in home confinement for fraudulently inflating the value of funds that ultimately collapsed, resulting in $3.2 billion in investor losses.

Gregoire Tournant, the former chief investment officer of the US-based Structured Alpha group of Allianz hedge funds, was sentenced Friday by US District Judge Laura Taylor Swain in Manhattan. The penalty, which also included three years of probation, was far below the seven years in prison sought by federal prosecutors.

Gregoire Tournant arrives at federal court in New York on Dec. 6.

Photographer: Yuki Iwamura/Bloomberg

Tournant pleaded guilty in June to two counts of investment adviser fraud. Prosecutors said ...