Former AIG Employee Sues Accounting Firm, Board Over Audits

January 5, 2011

A former employee of American International Group has filed a lawsuit claiming that PricewaterhouseCoopers was negligent in its audits of AIG and that the board of the bailed-out insurer failed to pursue a claim against the accountants.

The suit, filed in federal court in Manhattan on Tuesday by Wanda Mimms, was brought as a derivative action on behalf of the AIG Incentive Savings Plan. PwC and AIG’s board are named as defendants.

Mimms contends the AIG incentive plan held shares in the company from late February 2008 through late January 2009. PwC, as AIG’s auditor, should have known the share price was inflated by inaccurate financial statements, Mimms argues.

Mimms demanded in July 2010 that AIG’s investment committee pursue action against PwC for losses in the plan. Her demand was referred to AIG’s board, which rejected it in September, according to the lawsuit.

The lawsuit demands PwC make the incentive plan whole for its losses, as well as other relief.

A PwC spokesman said the company has not been served and cannot comment at this time. An AIG spokesman declined to comment.

The case is Mimms v. PricewaterhouseCoopers LLP et al, U.S. District Court, Southern District of New York, No 11-00030.

(Reporting by Ben Berkowitz, additional reporting by Dena Aubin; Editing by Phil Berlowitz)

Was this article valuable?

Here are more articles you may enjoy.