The U.S. Department of Justice (DOJ) investigation into German insurer Allianz is looking at possible misconduct by fund managers and misrepresentation of risk to investors, three people with knowledge of the matter told Reuters. The probe, disclosed by the company on Aug. 1, is focused on Allianz funds that used complex options strategies to generate returns but racked up massive losses when the spread of COVID-19 triggered wild stock market swings in February and March 2020. The DOJ is looking into whether managers at Allianz Global Investor's Structured Alpha Funds abandoned a strategy to provide protection against market crashes and how they communicated the amount of risk to investors. The U.S. Security and Exchange Commission (SEC) launched a probe into the demise of the funds last year, Allianz disclosed after the Arkansas Teacher Retirement System filed a lawsuit in July 2020 seeking $774 million in damages. Read more.