A federal judge has approved a $115 million settlement between American International Group Inc. (AIG) shareholders and former CEO Hank Greenberg and other Defendants over alleged improper accounting at the insurance giant. This is the latest in a series of settlements coming out of class-action securities fraud litigation linked to practices at the insurer dating to 1999. So far, more than $900 million in settlements has been approved with defendants including AIG. U.S. District Judge Deborah Batts in Manhattan gave final approval to the latest settlement act at a court hearing, calling it “fair, reasonable and adequate.”
Judge Batts approved a $725 million settlement with AIG in February 2012. She earlier approved a $97.5 million settlement with accounting firm PricewaterhouseCoopers. The settlement resolves a 2004 lawsuit accusing the Defendants of misleading investors in connection with an alleged illegal bid-rigging scheme in the insurance industry. The lawsuit also accused Greenberg and others of making false and misleading statements about an alleged accounting fraud that resulted in a $3.9 billion restatement by AIG in 2005. The alleged activities took place well before AIG accepted $182 billion of taxpayer bailouts during the financial crisis in 2008 and 2009. Among those participating in the settlement are Greenberg, former chief financial officer Howard Smith, two other executives and two of Greenberg’s companies, C.V. Starr & Co. and Starr International Co.
Two Ohio state pension funds acted as lead Plaintiffs for the class, which covers AIG shareholders who bought stock from October 1999 to April 2005. An AIG spokesman declined to comment on the settlement. The case is In re American International Group Inc. Securities Litigation, in the U.S. District Court, Southern District of New York, No. 04-08141.
Source: Insurance Journal
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