Buckeye State Tapped As Lead AIG Fraud Case Plaintiff

February 18, 2005 (PLANSPONSOR.com) - Three of Ohio's public retirement systems have been appointed lead plaintiff in a securities class action lawsuit against giant insurer American International Group, Inc. (AIG), alleging that the firm engaged in bid-rigging and other illegal actions.

Ohio Attorney General Jim Petro announced said in  a Web statement that the allegations against AIG include misleading investors by being part of a bid-rigging scheme and by the true nature of its contingent-commission arrangements with Marsh & McLennan and other insurance brokers.

Petro pointed out that two AIG executives have pleaded guilty (See  Spitzer Insurance Bid-Rigging Probe Prompts Three More Guilty Pleas ) and that the documents produced to regulators and the investigations concerning bid-rigging and its sale of “income-smoothing” products and creation of off balance sheet partnerships lead to the appearance that AIG was aware of the illegal nature of what it was doing.

Preliminary loss estimates to the Ohio Public Employees Retirement System (OPERS), State Teachers Retirement System of Ohio (STRS Ohio) and Ohio Police & Fire Pension Fund could be as much as $70 million to $75 million, Petro reported.

“As I have continued to state, the blatant disregard for generally accepted accounting principles seems to be pervasive in business today, and my office will seek to protect all investors from such actions. Obtaining lead plaintiff status will allow Ohio to champion investor rights and corporate reform as we fight this deep corporate malaise,” Petro said.