Ohio Attorney General Jim Petro announced last month that three of Ohio’s public retirement systems have been appointed lead plaintiff in a securities class action lawsuit against American International Group Inc. that alleges AIG engaged in “bid-rigging” and other fraudulent behavior. Preliminary loss estimates to the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police & Fire Pension Fund could be as much as $70 to $75 million, while losses to the entire class could be billions of dollars.
According to Petro, the allegations against AIG include misleading investors by being part of a bid-rigging scheme and by the true nature of its contingent-commission arrangements with Marsh & McLennan and other insurance brokers. Two AIG executives have pleaded guilty, the documents produced to regulators and the investigations concerning bid-rigging and its sale of “income-smoothing” products and creation of off-balance sheet partnerships lead to the appearance that AIG was aware of its wrongful conduct. The class action is currently pending in the U.S. District Court for the Southern District of New York.
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