American International Group, Inc. ("AIG" or the Company) is a global finance and insurance corporation.
The original Complaint charges AIG and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Complaint alleges that during the Class Period, Defendants disseminated false and misleading financial statements to the investing public. The true facts, which were known by each of the Defendants but concealed from the investing public during the Class Period, were as follows: (a) that the Company was paying illegal and concealed "contingent commissions" pursuant to illegal "contingent commission agreements;" (b) that by concealing these "contingent commissions" and such "contingent commission agreements," the Defendants violated applicable principles of fiduciary law, subjecting the Company to enormous fines and penalties totaling potentially tens, if not hundreds, of millions of dollars; (c) that Defendants had concealed the fact that AIG had engaged in illegal transactions using PNC-style structures with at least five additional insurers (in addition to PNC), contrary to Defendants' claims on January 30, 2002; and (d) that as a result, the Company's prior reported revenue and income was grossly overstated. The Complaint further alleges that on October 14, 2004, Elliot Spitzer announced he had charged several of the nation's largest insurance companies and the largest broker with bid rigging and payoffs he claimed violated fraud and competition laws. On this news, AIG shares fell $6.80 to $60.19 on unusually heavy trading volume of approximately 50 million shares.
On February 10, 2005, the Court entered the Order signed by U.S. District Judge Laura Taylor Swain granting the motion to appoint the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, and the Ohio Police and Fire Pension Fund as lead Plaintffs. Goodkind Labaton Rudoff & Sucharow LLP and Hahn Loeser & Parks LLP were approved as co-lead Counsel. That day, the Court also entered the Order consolidating all cases, not including actions brought pursuant to ERISA. The lead Plaintiffs were given 60 days to file a Consolidated Amended Complaint. On April 19, 2005, a Consolidated Amended Class Action Complaint was filed.
In May 2005, a similar class action Complaint, San Francisco Employees' Retirement System, et al. v. American International Group, Inc., et al., was filed against AIG and later consolidated into this 2004 case by the Order entered on June 24, 2005, in the 2005 case. According to the Complaint for the 2005 case, the Complaint alleges causes of action under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934. The named Defendants are AIG, C.V. Starr & Co., Inc., Starr International Inc., General Reinsurance Corporation and certain individual Defendants. The Complaint alleges that Defendants made false statements and concealed material information concerning AIG's financial condition and accounting practices relating to, among other items, non-traditional insurance products, assumed reinsurance transactions, and use of affiliated entities for executive compensation. Plaintiff alleges that AIG structured transactions for the primary purpose of accomplishing a desired accounting result, including a sham reinsurance deal set up with Defendant General Reinsurance Corporation to bolster reserves, transactions with supposedly independent companies that were in fact controlled by AIG, misclassified losses, and questionable estimates on deferred acquisition costs. The Complaint further alleges that it and other class members suffered damages from this specific conduct, first revealed to the public in 2005. Plaintiff alleges that, between February 14, 2005, when AIG first disclosed that it had received subpoenas from the SEC and the New York Attorney General, and April 1, 2005, after AIG issued a press release relating to this conduct, AIG's share value fell approximately 30%. AIG has since announced a need to restate its financial statements for the years ended December 31, 2003, 2002, 2001 and 2000, the quarters ended March 31, June 30, and September 30, 2004 and 2003, and the quarter ended December 31, 2003, and that its prior financial statements for those periods should no longer be relied upon. Plaintiff's action seeks to pursue claims related to the alleged misconduct that was not revealed until 2005 and manifested by the loss of share value in 2005. Conversely, Plaintiff's action is not based upon and does not seek to represent a class to pursue claims related to Defendants' participation in so-called "bid rigging" and/or "PNC" transactions, which were the subject of other regulatory investigations and civil actions originally filed in 2004, and which allegedly led to independent damages manifested by a drop in AIG's share value in 2004.
On September 27, 2005, the Plaintiffs further amended their Complaint by filing a Consolidated Second Amended Complaint. In November and December 2005, the Defendants filed numerous motions to dismiss the Consolidated Second Amended Complaint, which were denied by Court Order on April 27, 2006.
On June 20, 2006, the Court entered the Stipulation and Order of Dismissal Pursuant to Fed.R.Civ.P.41(a)(2). According to the Order, the lead Plaintiffs voluntarily dismisses any and all claims against Defendant Evan Greenberg with prejudice.
On December 15, 2006, the Plaintiffs filed a Consolidated Third Amended Class Action Complaint. On February 20, 2008, the lead Plaintiff filed a motion for class certification.
On May 6, 2008, a Stipulation and Order of Dismissal was signed by Judge John E. Sprizzo voluntarily dismissing and all claims against Defendant Union Excess Reinsurance Company, Ltd. with prejudice.
On October 3, 2008, the Plaintiffs filed a motion for preliminary approval of settlement with Defendant PricewaterhouseCoopers LLP.
According to a press release dated October 3, 2008, PricewaterhouseCoopers has agreed to pay $97.5 million to settle investors' claims in securities litigation against AIG. This settlement will be one of the ten highest settlements to be paid by an accounting firm to settle a securities fraud class action. PricewaterhouseCoopers, which continues to serve as AIG's independent auditor, was alleged in the class action Complaint to have violated the securities laws in connection with its providing auditing services and its issuance of unqualified audit opinions on AIG's financial statements during the years at issue in the case. "This important settlement represents a tremendous result for investors," said Chris Geidner, Principal Assistant Attorney General. "We are pleased with this milestone and will continue to vigorously pursue investors' claims against the remaining defendants in the case." The Ohio Attorney General's Office is prosecuting the case on behalf of three named Plaintiffs, the Ohio Public Employees Retirement System, State Teachers Retirement System and Ohio Police & Fire Pension Fund, and seeks damages for investors who purchased AIG securities between October 28, 1999 and April 1, 2005.
On October 15, 2008, the motion for preliminary approval of settlement with Defendant PricewaterhouseCoopers LLP was approved.
On February 25, 2009, the Plaintiffs filed a motion to approve a class action settlement with General Reinsurance Corporation ("Gen Re").
According to an article dated February 25, 2009, Ohio's attorney general announced Wednesday that Gen Re had agreed to pay $72 million to settle a securities class action related to an alleged bid-rigging scheme and the dissemination of false and misleading statements at AIG. Attorney General Richard Corday's office is litigating the case in the U.S. District Court for the Southern District of New York on behalf of the Ohio Public Employees Retirement System, State Teachers Retirement System and Ohio Police and Fire Pension Fund. “The $72 million proposed settlement with Gen Re, a third-party participant in the alleged securities fraud at AIG, is an outstanding result for the class,” Counsel for the Plaintiffs said in a motion seeking approval of the settlement. “Lead plaintiff is not aware of any similar recovery in any private securities fraud case being paid by a third party, such as Gen Re, that was not an issuer, auditor, legal/financial adviser, analyst or underwriter.”
According to an article dated September 12, 2008, former AIG Chairman and CEO Maurice "Hank" Greenberg and three other former AIG executives have agreed to pay shareholders $115 million to settle claims that they overpaid a company controlled by the one-time insurance kingpin. The settlement, which Plaintiffs lawyers call the largest ever in a derivative suit in Delaware Chancery Court, comes on the eve of a trial that would have taken place before Vice Chancellor Leo Strine Jr. … The case began when the Teachers Retirement System of Louisiana -- represented by Grant & Eisenhofer -- filed suit against Greenberg, and the former executives in the Chancery Court on Dec. 31, 2002. … Grant says that $29.5 million from the settlement sum will come from Greenberg and the three former AIG executives, with the remaining $85.5 million picked up by AIG's directors and officers insurance. Being a derivative suit, all of the money will go back to AIG.
As a result of the settlement noted above, on October 3, 2009, a Stipulation and Order of Voluntary Dismissal was filed voluntarily dismissing the federal claims against Maurice R. Greenberg, Howard I. Smith, Christian M. Milton, Michael J. Castelli, C.V. Starr & Co., Inc., and Starr International Company, Inc., without prejudice and without costs to any party.
On November 10, 2009, the action was voluntarily dismissed as to Defendants Frank J. Hoenemeyer and L. Michael Murphy with prejudice. On January 21, 2010, the action was voluntarily dismissed as to Defendant Richmond Insurance Company Ltd.
On February 22, 2010, lead Plaintiffs' motion for class certification, as defined by the Court, was granted. The Defendants filed an appeal as to the order certifying the action.
According to a press release July 16, 2010, Ohio Attorney General Richard Cordray announced a $725 million securities class action settlement against AIG and certain individual directors and officers. The settlement resolves allegations of AIG's wide-ranging fraud from October 1999 to April 2005 involving anti-competitive market division, accounting violations and stock price manipulation, and brings total expected recovery for AIG shareholders to over $1 billion. The settlement is subject to court approval. … As part of the total case involving AIG, the Ohio Funds and the Ohio Attorney General's Office previously announced a $72 million settlement with Gen Re, a $97.5 million settlement with PricewaterhouseCoopers and a $115 million settlement with CEO Maurice R. "Hank" Greenberg and other AIG executives (Howard I. Smith, Christian M. Milton and Michael J. Castelli) and related corporate entities (C.V. Starr & Co., Inc. and Starr International Co., Inc.). AIG has agreed to pay $725 million to the shareholder class in the primary settlement. An initial payment of $175 million will be payable after entry of a court order granting preliminary approval of the settlement. The remaining $550 million may be funded by AIG through one or more common stock offerings. If AIG does not fund the $550 million before court approval of the settlement, the Plaintiffs may terminate the agreement, elect to acquire freely transferable shares of AIG common stock with a market value of $550 million provided AIG is able to obtain all necessary approvals, or extend the period for AIG to complete a stock offering in order to fund the remainder of the settlement.
On September 23, 2010, an Order dismissing lead Plaintiffs' causes of action with respect to the Gen Re Defendants, and entering partial final judgment pursuant to Fed. R. Civ. P. 54(4b) was issued by the Court.
On October 21, 2010, the Plaintiffs filed a Notice of Appeal in the United States Court Of Appeals in connection with the Court’s final judgment.
On December 02, 2010, the Court issued an Order and Final Judgment as to Pricewaterhousecoopers, dismissing the Consolidated Third Amended Class Action Complaint dated December 15, 2006, in its entirety as to PWC, with prejudice, and without costs to any party.
Also on December 02, 2010, an Order Approving Co-Lead Counsel's Motion for Award of Attorneys' Fees and Reimbursement of Expenses and Lead Plaintiff's Request for Reimbursement of Expenses.
On December 13, 2010, the appellants filed a Notice of Appeal to the United States Court of Appeals for the Second Circuit.
On September 08, 2011, a number of the appellants withdrew their action from the Second Circuit Court of Appeals.
On September 23, 2011, pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, the parties stipulated and agreed to an amendment of the settlement.
The Court entered the Order from the U.S. Court of Appeals on January 6, 2012. The appeal was withdrawn.
On October 5, 2011, the Court issued a Preliminary Approval Order approving the terms and conditions set forth in the Agreement of Compromise and Settlement. On February 3, 2012, the Court issued another Preliminary Approval Order approving the terms and conditions set forth in the Contingent Agreement of Compromise and Settlement.
On February 2, 2012, the Court issued a Memorandum and Order, an Order Approving Lead Counsel's Motion for an Award of Attorneys' Fees and Reimbursement of Expenses and Lead Plaintiff's Request for Reimbursement of Expenses, and an Order Approving Plan of Allocation.
On February 21, 2013, the Court issued a Memorandum and Order denying the request from the New York Attorney General’s office for "elevated" amicus curiae standing.
On April 4, 2013, Pursuant to Fed. R. Civ. P. 23(e)(2) and (h)(3), the Court found that the Orloff Trust lacked standing to object to the Proposed Settlement and was subsequently overruled.
On April 19, 2013, the Court certified this class of Plaintiffs to proceed with this class action suit. The Court appointed lead Plaintiffs to serve as class representatives and appointed lead Plaintiffs’ Counsel to serve as class Counsel.
On September 11, 2013 the court issued an Order and Final Judgment as to Gen Re Defendants certifying the Clerk of the Court is ordered, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, to enter this Judgment forthwith.
On September 11, 2013 the court issued an Order Approving Lead Counsel's Motion for an Award of Attorneys' Fees and Reimbursement of Expenses and Lead Plaintiff's Request for Reimbursement of Expenses in Connection with Gen Re Settlement certifying the Court retains continuing and exclusive jurisdiction over the Settlement, the administration and distribution of the Settlement and the attorneys' fee award and its payment.
On September 11, 2013 the court issued an Order Approving Plan of Allocation certifying the Court hereby finds and concludes that the Plan of Allocation set forth in the Notice is, in all respects, fair and reasonable and the Court hereby approves the Plan of Allocation.
