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Ohio AG says ruling builds pressure on AIG
24 February 2010
Richard Cordray, the attorney general of Ohio, said he is encouraged by a federal court ruling granting class certification in his securities litigation against US insurer American International Group.
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Richard Cordray, the attorney general of Ohio, said he is encouraged by a federal court ruling granting class certification in his securities litigation against US insurer American International Group (AIG). The ruling in the US District Court for the Southern District of New York allows shareholders to proceed as a group with their lawsuit against AIG.
The case against AIG and its executives involves allegations of anti-competitive practices including market division through the use of undisclosed contingent commissions and bid-rigging, as well as allegations of a accounting fraud that led to a $3.9bn restatement of AIG’s publically available financial and regulatory filings.
Cordray says his office has negotiated settlements against other defendants totaling $284.5m in this case. He believes this week’s ruling in New York will help him in his goal to make AIG take responsibility.
“This ruling builds the pressure on AIG in this case,” said Cordray in a statement. “Typically, a court’s grant of class certification clears the way for determining whether a company is or is not liable for its alleged misconduct. Up until now, despite our considerable progress with these claims, AIG has refused to accept responsibility and engage in meaningful settlement discussions. If they continue their resistance, we are now cleared to take them to trial.
“The investors and retirees who were harmed by AIG have been waiting for years to be made whole. AIG has taken billions of dollars in bailout money from taxpayers and, at the same time, is seeking to pay hundreds of millions of dollars in bonus compensation that even federal regulators have called ‘outrageous.’ Today we are a substantial step closer to justice for Ohio’s pension systems and their members.”
Cordray is litigating the case on behalf of three named plaintiffs – the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police and Fire Pension Fund – which were named lead plaintiffs by the court in February 2005. Cordray says this week’s ruling clears the way for the lead plaintiffs to pursue claims against AIG for the entire class of investors who purchased AIG securities between October 28 1999 and April 1 2005.