American International Group Inc. Case 10/03/2008
FEBRUARY 2012 - According to the Notice:
Statement of Plaintiff Recovery: This Notice advises you of a proposed partial settlement (the “Settlement”) consisting of $115 million in cash, plus interest as it accrues (the “Settlement Amount”) in a consolidated class action lawsuit (the “Action”) brought by the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police & Fire Pension Fund (collectively, “Lead Plaintiff” or “the Ohio State Funds”), on behalf of the Settlement Class against Maurice R. Greenberg, Howard I. Smith, Christian M. Milton, Michael J. Castelli, C.V. Starr & Co., Inc., and Starr International Company, Inc. (collectively, “the Starr Defendants”), among others. If approved by the Court, this Settlement would finally resolve the Claims brought on behalf of the Settlement Class against the Star Defendants.
The Settlement is separate from a related previously-announced settlement in the Action between Lead Plaintiff and AIG (the “Company Settlement”), which was approved by the Court on February 3, 2012. The Settlement is also separate from a related previously-announced settlement with defendant PricewaterhouseCoopers LLP, (the “PwC Settlement”), which was approved by the Court on December 2, 2010. In addition, Lead Plaintiff reached another
separate settlement with defendant General Reinsurance Corporation (“Gen Re”) on February 24, 2009 (“Gen Re Settlement”), however on September 10, 2010, the Court declined to preliminarily approve the Gen Re Settlement and dismissed all claims in the Action against Gen Re. On October 21, 2010, Lead Plaintiff filed a notice of appeal from the dismissal. On January 9, 2012, the United States Court of Appeals for the Second Circuit heard oral argument on the
The Action alleges, among other things, that during the Class Period, the Starr Defendants made materially false and misleading statements and omissions in connection with the involvement of AIG in an allegedly illegal market division scheme with Marsh & McLennan Companies (“Marsh”) and others, as well as an alleged accounting fraud that led to AIG’s $3.9 billion restatement or adjustment of earnings in May 2005. The Action also alleges certain market manipulation claims. The Consolidated Third Amended Complaint (“Complaint”) alleges violations of Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”) and Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
The Settlement will resolve all claims against the Starr Defendants and will create a settlement fund to pay the claims of investors who purchased or otherwise acquired AIG’s publicly-traded common stock, debt and options during the Class Period. (See below at page 4 for more information about eligible “AIG Securities.”) The Distribution Amount (the Settlement Amount less any Notice and Administrative Expenses, attorneys’ fees and litigation expenses awarded to Lead Plaintiff’s counsel, expenses awarded to Lead Plaintiff and Tax Expenses) will be distributed in accordance with a proposed plan of allocation (the “Plan of Allocation”), which is described herein. Based on Lead Plaintiff’s damages consultant’s estimate of the number of shares of common stock entitled to participate in the Settlement, given the allocation of 5% of the recovery to debt purchasers and assuming that all shares entitled to participate do so, Lead
Plaintiff estimates that the average recovery per damaged share would be approximately $0.07 per share, before deduction of any court-awarded fees and expenses.1 An individual Settlement Class Member’s actual recovery will depend on many factors, for example: (1) the total number of claims submitted; (2) when the Settlement Class Member purchased AIG Securities during the Class Period; (3) the purchase price paid; (4) the type of security bought; and (5)
whether those AIG Securities were held at the end of the Class Period or sold during the Class Period (and, if sold, when they were sold and the amount received). See the Plan of Allocation beginning on page 10 for more information on your potential Recognized Loss.
Reasons for Settlement: The Settlement resolves claims against the Starr Defendants for allegedly violating the federal securities laws by allegedly failing to disclose the truth about certain of AIG’s business practices and financial results and for damages allegedly caused by these practices and by market manipulation of AIG’s securities. However, the Settlement is not and should not be construed as an admission of any fault, liability or wrongdoing whatsoever by the Starr Defendants. In light of the amount of the Settlement and the immediacy of recovery to the Settlement Class, Lead Plaintiff believes that the proposed Settlement is fair, reasonable and adequate, and in the best interests of the Settlement Class. Lead Plaintiff believes that the Settlement provides a substantial benefit in the form of $115 million, less the various deductions described in this Notice, as compared to the risks and delays of proceeding with the Action against the Starr Defendants. These risks include the fact that there is no assurance that Lead Plaintiff would recover as much as was achieved in this Settlement at a later stage in the litigation. Moreover, even if the case were to proceed and a later recovery obtained, it would take several more years of expert discovery, motion practice, trial and further appeals to obtain such a recovery, during which time the Starr Defendants would have the opportunity to assert substantial defenses to the claims asserted against them. The risks also include that the Starr Defendants could prevail in all or part of the Action, in which case Lead Plaintiff may obtain less or no recovery at all from the Starr Defendants.
2008 - According to a press release dated October 3, 2008, PricewaterhouseCoopers LLP has agreed to pay $97.5 million to settle shareholders' claims in litigation against American International Group, Inc. (AIG).
AIG's independent auditor PricewaterhouseCoopers, was alleged 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 class period.
The case is being prosecuted by the Ohio Attorney General's Office on behalf of the Ohio Public Employees Retirement System, State Teachers Retirement System and Ohio Police & Fire Pension Fund, seeking damages for investors who purchased AIG securities during the class period.
The claims against the defendant are based on AIG's alleged involvement in a market division scheme others in the insurance industry that was disclosed in October 2004, as well as AIG's improper accounting for reinsurance and other transactions that led to the company's $3.9 billion restatement or adjustment of earnings in May 2005.