Ohio Wins $98M Settlement in State Pension Fund Suit with PWC

October 6, 2008 (PLANSPONSOR.com) - PricewaterhouseCoopers LLP, independent auditor for the embattled American International Group, Inc. (AIG), has agreed to a $97.5-million settlement in a securities fraud suit filed by three Ohio state pension programs.

Ohio Attorney General Nancy Rogers announced the pact reached in the case on behalf of the Ohio Public Employees Retirement System, State Teachers Retirement System, and Ohio Police & Fire Pension Fund. The action seeks damages for investors who purchased AIG securities between October 28, 1999 and April 1, 2005.

According to Rogers’ announcement, PricewaterhouseCoopers, which continues to serve as AIG’s independent auditor, was charged in the class-action complaint with violating the securities laws in connection with its providing auditing services and its issuance of unqualified audit opinions on AIG’s financial statements during the years at issue in the case.

The state official said the claims are based on AIG’s alleged involvement in a market division scheme with others in the insurance industry that was disclosed in October 2004, as well as AIG’s improper accounting for reinsurance, and other transactions that led to the company’s $3.9 billion restatement or adjustment of earnings in May 2005.

The settlement must be approved by the United States District Court for the Southern District of New York in Manhattan.