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AIG to pay US$725 million to settle U.S. fraud lawsuit

AIG to pay US$725 million to settle U.S. fraud lawsuit

U.S. insurance giant AIG has agreed to pay US$725 million to settle allegations of market fraud brought by three Ohio pension funds, the state's attorney general said Friday.
"The settlement resolves allegations of AIG's wide-ranging fraud from October 1999 to April 2005 involving anti-competitive market division, accounting violations and stock price manipulation," the office of attorney general Richard Cordray said in a statement.
Cordray declared the class-action settlement a victory for the "teachers, firefighters, police officers, and public employees," who were "harmed by AIG's misconduct."
The company was accused of accounting fraud designed to boost AIG's reserves to cover claims, a bid-rigging scheme with insurance brokers and executives ordering traders to inflate AIG's stock price.
Cordray said it was the 10th-largest securities class-action settlement in U.S. history.
It is the latest blow to the beleaguered firm, which needed nearly US$70 billion in government bailouts to stay afloat after the subprime mortgage crisis.
Earlier this week Harvey Golub resigned as chairman of the board, amid rumors about discord among top executives at the firm.


Updated : 2021-03-08 15:26 GMT+08:00