(April 10, 2013) — American International Group (AIG) has had a $115 million settlement signed off by a federal judge to resolve claims from disgruntled investors, including three Ohio public sector pension funds.
A settlement has long been on the cards, having first been announced in 2009, but the judge’s settlement will help resolve a consolidated shareholder lawsuit, brought after accusations of inaccurate accounting issues.
Maurice Greenberg, the former chairman of AIG, was forced to resign from the company in March 2005 during regulatory probes into the insurer’s accounting.
Investors have filed numerous lawsuits against Greenberg and the other former executives in recent years.
The lead plaintiffs in the lawsuit settled this week were three Ohio public employee retirement funds; the $69 billion Ohio Public Employees Retirement System, $62.9 billion Ohio State Teachers Retirement System, and $10 billion Ohio Police and Fire Pension Fund.
At a hearing in Manhattan federal court, US District Judge Deborah Batts found the settlement to be “fair, reasonable and adequate“, according to the Wall Street Journal.
In 2005, AIG was forced to restate more than four years of its earnings and said that several former executives were able to “circumvent internal controls over financial reporting”.
The following year, the insurer agreed to pay more than $1.6 billion to settle accounting fraud allegations by the New York attorney general’s office and the SEC.
Greenberg and Howard Smith, AIG’s former chief financial officer, separately agreed to pay $16.5 million to settle with the SEC in 2009. Greenberg and Smith didn’t admit or deny wrongdoing in that agreement.
Related news: AIG Class Action Approved for Ohio Plans