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February 26, 2010 Friday 06:40 PM EST
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AIG Agrees to $8 Million Settlement With Oregon Retirement Fund
Jesse A Hamilton
SALEM, Ore.
American International Group Inc. has settled a lawsuit that had accused it of securities fraud in a $15 million loss suffered by the Oregon Public Employee Retirement Fund. Making up for those Oregon losses from its AIG investment, the insurer agreed to pay $8 million, but did not formally admit wrongdoing. “Although AIG denies all liability and allegations of wrongdoing in connection with this lawsuit, AIG is pleased to have resolved the matter and avoided the distraction and cost of further litigation,” AIG spokesman Mark Herr said. “We remain focused on repaying the American taxpayer.”The state had filed the lawsuit, alleging a pattern of poor disclosure and bid rigging by AIG that led to losses within the state’s investment portfolio between 2000 and 2005. That portfolio’s largest component is its pension fund for public employees, which has a value of $51.5 billion, according to the state.State Treasurer Ben Westlund and Attorney General John Kroger said AIG (NYSE: AIG) was found to “have employed more of the credit default swaps than they could pay for, and it failed to properly account for that debt in regulatory filings.”AIG stock closed at $24.77 a share on Feb. 26–down 9.96% from the previous close. Most AIG insurers have current Best’s Financial Strength Ratings of A (Excellent).(Jesse A. Hamilton, Washington bureau manager: Jesse.Hamilton@ambest.com)
February 27, 2010
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