[JURIST] The US Court of Federal Claims [official website] ruled [opinion, PDF] Monday that the Federal Reserve [official website] bailout of AIG [corporate website] in 2008 exceeded its authority but did not award any damages. The suit was brought by former AIG CEO Maurice Greenberg and claimed that the Federal Reserve’s taking of a 79.9 percent equity share as consideration for bailout funds should be considered a taking without just compensation and an illegal exaction under the Fifth Amendment [Cornell LII backgrounder]. The court ruled in favor of Greenberg declaring that the government acted “more harshly” towards AIG than other similarly placed institutions and declared that the Federal Reserve’s action was “an illegal exaction under the Fifth Amendment.” However, the court refrained from imposing damages as it found Greenberg and other shareholders failed to prove that they were damaged by the taking. The court stated that if the government had not intervened, AIG would have been forced to file for bankruptcy and the shares in question would have been worthless.

AIG has been part numerous lawsuits concerning the 2008 financial crisis [BBC backgrounder]. In March a judge for the US District Court for the Southern District of New York [official website] approved [JURIST report] a $970.5 million settlement between AIG and that shareholders who said they were misled about the company’s subprime mortgage exposure. In April 2013 the same court approved [JURIST report] a $115 million settlement between AIG shareholders and the company’s former CEO and other executives in order to resolve allegations that the insurer misled investors about financial records. In September 2010 a class-action case moved forward against former AIG chief executive Martin Sullivan, former executive for AIG’s subsidiary Joseph Cassano and multiple other former chief and senior executives among accusations of fraudulent intent to mislead the market [JURIST report] and failing to disclose to its shareholders the risks the company was taking in issuing sub-prime mortgages. In May 2010 the US Department of Justice [official website] decided not to file charges [JURIST report] against Cassano, ending a two-year criminal investigation of several executives from AIG’s Financial Products subsidiary, which played a large role in constructing complex contracts known as credit-default swaps [TIME backgrounder] that insured bond losses tied to the US housing market. In 2009 former AIG executives agreed to settle [JURIST report] a suit [complaint, PDF] brought by the SEC alleging their involvement in inflating the company’s reported financial records.