A news release from Ohio Attorney General Richard Cordray announced the agreement in principle to settle claims against Greenberg, AIG executives Howard I. Smith, Christian M. Milton and Michael J. Castelli and related corporations C.V. Starr & Co., Inc. and Starr International Co., Inc.
Cordray filed the suit on behalf of the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police and Fire Pension Fund.
The Attorney General noted that he will now focus on preparing the case for trial against the primary remaining defendant, AIG. “AIG cannot be permitted to defraud investors and other companies who play by the rules,” Cordray said in the news release. “This agreement in principle will help compensate investors – including Ohio pension funds – who were harmed by AIG’s misconduct.”
According to the news release. the state of Ohio’s case involve allegations of anti-competitive practices, such as market division through the use of undisclosed contingent commissions and bid-rigging, as well as allegations of a “massive” accounting fraud that led to a $3.9-billion restatement of AIG’s publicly available financial and regulatory filings.
The case sought damages for investors who purchased AIG securities between October 28, 1999 and April 1, 2005.
Cordray said the latest case represents the third multimillion dollar agreement negotiated by the Ohio pension funds in the AIG case, along with a previous $97.5-million settlement with PricewaterhouseCoopersLLP and a $72-million settlement with General Reinsurance Corporation.
Last week the Securities and Exchange Commission announced that Greenberg had agreed to pay a $15 million fine to settle fraud charges.
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