In re American International Group, Inc. Securities Litigation

Settled: September 11, 2013

In one of the most complex securities cases in history, the Firm secured over $1 billion in total settlements, including a landmark $725 million with AIG regarding allegations of bid rigging and accounting fraud.



Gen Re Settlement
: Granted Final Approval on September 11, 2013
Starr Settlement
: Granted Final Approval on April 11, 2013
Company Settlement: Granted Final Approval on February 3, 2012
PwC Settlement: Granted Final Approval on December 2, 2010


Background

Labaton Sucharow represented lead plaintiff Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police & Fire Pension Fund ("lead plaintiff" or the "Ohio Funds"), along with the Attorney General of the State of Ohio, in In re American International Group, Inc. Securities Litigation.

The case alleged numerous securities violations against American International Group (the "Company" or "AIG") and twenty-one other defendants, including Maurice R. "Hank" Greenberg, AIG's former long-time Chairman and CEO; PricewaterhouseCoopers ("PwC"), the company's outside auditors; and General Reinsurance Corp. ("Gen Re"), a Berkshire Hathaway subsidiary that allegedly structured and executed a $500 million sham reinsurance agreement that allowed AIG to improperly improve its reported reserves. On May 31, 2005, AIG filed its 2004 Form 10-K, restating the Company's earnings, reducing its net income from 2000 through 2004 by $3.9 billion, and wiping out $2.26 billion in shareholder equity.

Key Rulings

In April and May of 2006, the court ruled on all outstanding motions to dismiss and denied twenty-one of them in their entirety.

On February 22, 2010, the court issued a 90-page Opinion granting lead plaintiff's motion for class certification in significant part. The court certified a litigation class including persons and entities who either (1) purchased or otherwise acquired AIG securities during the class period of October 28, 1999 to April 1, 2005, and who possessed those securities over one or more of the dates of October 14, 2004, October 15, 2004, March 17, 2005, or April 1, 2005; (2) held the common stock of HSB Group at the time HSB Group was acquired by AIG in a stock for stock transaction; or (3) held the common stock of American General at the time American General was acquired by AIG in a stock for stock transaction. Defendants and other defined affiliated persons and entities are excluded from the class. The court appointed Labaton Sucharow and Hahn Loeser & Parks LLP as co-lead counsel for the class.

Settlements

On November 30, 2010, a hearing was held before Judge Batts to determine whether the proposed $97.5 million settlement with defendant PwC (the "PwC Settlement") should be approved. On December 2, 2010, the Court approved the PwC Settlement. The deadlines in the PwC Settlement to submit a Proof of Claim, object to the Settlement, or seek exclusion from the Settlement Class have passed. A motion for approval of an initial distribution of Settlement proceeds is pending before the Court.

On January 31, 2012, a hearing was held before Judge Batts to determine whether the proposed $725 million settlement resolving the claims against defendant AIG and certain individual AIG directors and officers (the "Company Settlement") should be approved. On February 3, 2012, the Court approved the Company Settlement. The deadlines in the Company Settlement to submit a Proof of Claim, object to the Settlement, or seek exclusion from the Settlement Class have passed. A motion for approval of an initial distribution of Settlement proceeds is pending before the Court.

On April 10, 2013, a hearing was held before Judge Batts to determine whether the proposed $115 million Settlement with Hank Greenberg and related defendants (the "Starr Settlement") should be approved. On April 11, 2013, the Court approved the Starr Settlement. The deadlines in the Starr Settlement to submit a Proof of Claim, object to the Settlement or seek exclusion from the Settlement Class have passed.

On September 10, 2013, a hearing was held before Judge Batts to determine whether the proposed $72 million Settlement with Gen Re (the "Gen Re Settlement") should be approved. On September 11, 2013, the Court approved the Gen Re Settlement. The deadlines in the Gen Re Settlement to submit a Proof of Claim, object to the Settlement, or seek exclusion from the Settlement Class have passed.
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Please see the links to the right for downloadable copies of the Settlement Notice and the Order and Final Judgment relating to each of the four Settlements.

Additional information is available on separate websites maintained by the Settlement Administrator:

Gen Re Settlement: https://www.aigsecuritieslitigationgenresettlement.com/.
Starr Settlement: https://www.aigsecuritieslitigationstarrsettlement.com/.
Company Settlement: https://www.aigsecuritieslitigationcompanysettlement.com/.
PwC Settlement: http://www.aigsecuritieslitigationpwcsettlement.com/.