“Ohioans and Ohio retirees’ retirement accounts took a hit when AIG was accused of widespread misconduct. I’m glad these hard-working citizens, including Ohio’s first responders and teachers, will finally get some financial recovery,” DeWine said in a written statement. “This case sends a strong message to corporate wrongdoers.”
AIG agreed to the settlement to end the case and it does not admit to any wrong doing, according to the 184-page settlement agreement.
The case began under former Attorney General Jim Petro and was consolidated with eight other cases against AIG in 2005. Ohio Public Employees Retirement System, State Teachers Retirement System and Ohio Police & Fire Pension Fund were the lead plaintiffs for the entire class of investors who lost money. The case lasted six years, named 22 defendants and involved 53.6 million pages of documents and 97 depositions.
Ohio pension funds claimed that they lost a combined $95.8 million on their AIG holdings after the insurance giant disclosed an accounting fraud in 2005 and restated nearly four years of earnings, according to DeWine’s office.
The case spawned three other earlier settlements, which are still awaiting final court approval: Former AIG Chief Executive Maurice “Hank” Greenberg and other defendants agreed to a $115 million settlement over claims that they manipulated AIG stock for their own financial benefit; PricewaterhouseCoopers LLP agreed to a $97.5 million settlement; General Reinsurance Corp. agreed to pay $72 million.
All told, the case resulted in defendants agreeing to pay $1 billion in settlement fees, which DeWine’s office called the largest securities fraud class action settlement in which Ohio funds were the lead plaintiff.
Exactly how much Ohio investors receive out of the $1 billion depends on how many claims are filed. The pension funds are expected to receive a total of $9 million out of the entire settlement, including $5.5 million from the latest round.
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