American International Group Inc. today agreed to pay $725 million to settle a securities class action lawsuit alleging that the company fraudulently inflated its financial results. AIG said in an SEC filing today that it may sell common stock to raise $550 million of $725 million and, if it cannot raise that amount, the settlement agreement may be terminated.
Three Ohio public pension funds led the class action suit: the Ohio Public Employees Retirement System (OPERS), the State Teachers Retirement System of Ohio and the Ohio Police and Fire Pension Fund. Today, Ohio AG
Richard Cordray stated that taken together with prior settlements in the case, recovery for AIG shareholders in this case is expected to be $1.0095 billion--the tenth-largest securities class action settlement in U.S. history. Cordray stated that the case also represented "the first and only billion-dollar class action settlement since the financial crisis began to unfold in 2008."
Previously, the Ohio AG announced a $72 million settlement with General Reinsurance Corporation, a $97.5 million settlement with PricewaterhouseCoopers LLP and a $115 million settlement with CEO Maurice R. "Hank" Greenberg and other AIG executives and related corporate entities.