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AIG agrees to pay out $725m

Julie Carr Smyth
Friday 16 July 2010 19:00 EDT
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American International Group Inc. (AIG) and some of its directors and officers have agreed to a $725m (£475m) settlement to resolve allegations of wide-ranging fraud laid out in a class action suit led by three Ohio pension funds.

Ohio Attorney General Richard Cordray said the latest figure will combine with previous AIG settlements reached with secondary defendants to pay about $1bn to shareholders, including pensions representing firefighters, police, teachers, librarians and others. He characterised it as the 10th largest securities litigation settlement in US history.

The lawsuit alleged anti-competitive market division, accounting violations, and stock price manipulation by AIG between October 1999 and April 2005. "The serious misconduct by AIG more than deserves today's large settlement," said Mr Cordray.

AIG said in a statement: "This settlement ends a long-standing lawsuit, allowing AIG to continue to focus its efforts on paying back taxpayers."

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