A federal judge approved a $725 million class action settlement between Ohio Attorney General Mike DeWine and American International Group (AIG) Friday.
The state alleged AIG committed accounting fraud, collusion and stock price manipulation from October 1999 to April 2005. Three Ohio public funds led the class action lawsuit: Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio, and Ohio Police and Fire Pension Fund.
"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. "This case sends a strong message to corporate wrongdoers."
The state is still working out a claims process. The AG office said it would depend on how many investors come forward. Potentially, any shareholder who purchased AIG stock between the dates in the lawsuit could be eligible for compensation.
Taken with related cases between the state and AIG, shareholders in the state are expected to recover more than $1 billion, DeWine's office said.
General Reinsurance Corp. agreed to pay $72 million in investor claim over an allegedly fraudulent reinsurance transaction with AIG, which then allowed the firm to inflate its loan loss reserves.
An accounting fraud settlement with PricewaterhouseCoopers involving AIG totaled $97.5 million. Another settlement with AIG executives including former CEO Maurice Greenberg netted $115 million.