The suit, filed in US District Court in New York by law firm Mager, White & Goldstein LLP, charges AIG violated the Employee Retirement Income Security Act (ERISA) by not disclosing improper activities that ultimately diminished the value of the K plan stock shares.
The suit charged AIG’s financial officers have breached their fiduciary responsibilities since November 1, 1998, by claiming strong growth and positive results but failing to disclose the company’s involvement in contingent commissions paid to brokers and other activities that led to overstatements of AIG’s income and revenue.
Those overstatements led to an inflated stock price and participants lost money when the stock price dropped, the suit charges.
Earlier this month, Little Rock-based Emerson Poynter LLP announced it had launched an investigation into possible AIG ERISA violations by continuing to invest retirement plan assets in company stock even when such an investment wasn’t prudent, failing to disclose its business practices and financial performance to participants, and failing to avoid any conflicts of interest.
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