Louisiana teacher pension fund settles shareholder lawsuit with ex-AIG executives

[JURIST] The Teachers Retirement System of Louisiana [official website] on Thursday settled a shareholder suit against a group of former executives from American International Group (AIG) [corporate website], including AIG ex-CEO and chairman Maurice "Hank" Greenberg. The lawsuit, filed in 2002 in the Delaware Chancery Court, concerned improper transfers of approximately $1 billion from AIG to C.V. Starr & Co. [corporate website]. The former AIG executives, including Greenberg, were officers of C.V. Starr, an insurance company closely related to AIG, and received compensation from Starr in addition to their AIG salaries. The parties reportedly settled the lawsuit for $115 million, with $29.5 million to be paid by the defendants themselves, and a directors' and officers' insurance policy paying the remainder. The Wall Street Journal has more. Reuters has additional coverage.

In February 2006, AIG settled [JURIST report] fraud, bid-rigging, and improper accounting charges with the state of New York, the New York Attorney General's Office, and the US Justice Department for $1.6 billion. The money was distributed to investors, policyholders, and other injured states as well as the named plaintiffs. As part of the pact, the US Securities and Exchange Commission (SEC) [official website] also settled [press release] with AIG for $800 million. The charges alleged that AIG made multi-million dollar transactions with the Gen Re insurance group, a subsidiary of Berkshire Hathaway [corporate websites], to improve the appearance of profitability.



 

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