Earlier today, U.S. District Judge Laura Taylor Swain refused to dismiss a class-action lawsuit against American International Group Inc (AIG).
The judge wrote in her opinion that “construing the allegations in the complaint in the light most favorable to plaintiffs, the court concludes that plaintiffs have satisfied their burden of alleging facts giving rise to a strong inference of fraudulent intent” allowing the suit go forward.
A class-action lawsuit was brought by shareholders clams that AIG made misstatements about the valuation and inherent risk of its credit-default swap portfolio, which was backed by subprime mortgages. This exposure to the subprime mortgage market eventually led to a liquidity crisis at the AIG that required it accept billions of dollars of U.S. government funding in order to prevent bankruptcy. The complaint represents a class of investors who purchased AIG’s stock between March 2006 and September 2008 and names several current or former AIG executives as defendants.
The Michigan Office of Retirement Systems is the lead plaintiff in the consolidated lawsuit and acts as custodian for several state retirement systems in Michigan.
