NEW YORK, June 7 (Reuters) - A former Allianz

fund manager pleaded guilty on Friday over his role in a

meltdown of private investment funds sparked by the COVID-19

pandemic, and which according to prosecutors caused $7 billion

of investor losses.

Gregoire Tournant admitted to two counts of investment

adviser fraud, at a hearing before Chief Judge Laura Taylor

Swain of the federal court in Manhattan.

Tournant's case stemmed from the March 2020 collapse of the

German insurer's now-defunct Structured Alpha funds, which

Tournant had created and oversaw as chief investment officer.

The funds once had more than $11 billion of assets under

management, but lost about $7 billion in February and March 2020

as the start of the pandemic set off a worldwide market panic.

Prosecutors said Tournant misled investors about the funds'

risks by altering performance data and diverging from his

promised hedging strategy, and obstructed a U.S. Securities and

Exchange Commission probe by directing a colleague to lie.

In May 2022, Allianz agreed to pay more than $6 billion and

its U.S. asset management unit pleaded guilty to securities

fraud to resolve government probes into the funds collapse. Two

other former Allianz fund managers pleaded guilty in the case.

The Structured Alpha funds had bet heavily on stock options,

in a manner designed to limit losses in a market selloff, which

Tournant likened to a form of insurance.

Prosecutors said the fraud ran from 2014 through March 2020,

with Tournant being paid more than $60 million over that time.

Tournant previously pleaded not guilty to five criminal

counts including investment adviser fraud, securities fraud,

conspiracy and obstruction.

He had also accused the law firm Sullivan & Cromwell, which

had represented him and Allianz, of making him a scapegoat after

Allianz decided to cooperate with federal prosecutors.

Swain rejected Tournant's request to dismiss the criminal

case last August.

The case is U.S. v. Tournant, U.S. District Court, Southern

District of New York, No. 22-cr-00276.