Wolf Popper LLP has filed a lawsuit in the U.S. District Court for the Southern District of New York on behalf of participants and beneficiaries of the American International Group, Inc. (“AIG”) Incentive Savings Plan (the “Plan”), for violations of the federal pension law (ERISA) in connection with the loss in value of AIG’s common stock [NYSE: AIG] acquired and held by present and former employees of AIG through the Plan. The goal of this litigation is to recover damages sustained by the Plan and its participants and beneficiaries. The complaint can be viewed on Wolf Popper’s website or obtained from the Court.
According to Marian Rosner, who represents the Plaintiff, “the complaint alleges that AIG and the fiduciaries of the Plan have acted with disregard to their fiduciary duties under ERISA and once again employee retirement savings bear the brunt of the losses.”
The complaint alleges, among other things, that AIG, and certain of its officers and directors who are fiduciaries under the Plan, allowed the imprudent investment of the Plan’s assets in AIG common stock despite the fact that they knew or should have known that such investment was unduly risky and imprudent and that any reasonable fiduciary in possession of even some of the true facts extant at AIG during 2007 and 2008 would have avoided investment in AIG common stock and would have divested and/or hedged the AIG common stock in its participants’ portfolios. The complaint further alleges that from at least early 2007 through the present, AIG common stock has been an imprudent investment for the Plan because (1) AIG had over a half-trillion dollar exposure to the United States residential mortgage investment market which subjected AIG to the risk of massive losses of assets and stockholders’ equity; (2) AIG’s risk management systems were inadequate to allow management to track and hedge the foregoing risks; (3) AIG’s valuation system for its financial instruments was flawed and based upon estimates and estimating systems that were inconsistent with AIG’s information about real-world transactions in the same and similar instruments; (4) AIG’s accounting systems were fraught with material weaknesses that rendered the reports and valuations generated through those accounting systems inherently unreliable. In sum, AIG faced a dire financial crisis, which rendered AIG stock a seriously imprudent investment for the Plan and its participants. AIG’s and the fiduciaries’ alleged misconduct have caused the Plan to suffer losses of hundreds of millions of dollars.
Wolf Popper LLP has extensive experience representing shareholders, including retirement plan investors, in class actions, and has successfully recovered billions of dollars in securities actions. The firm currently serves as co-lead counsel in a class action ERISA lawsuit against Citigroup Inc., alleging similar claims to those alleged here against AIG. If you are a current or former employee of AIG, or a subsidiary of AIG, who held AIG stock through the Plan from May 11, 2007 to the present.
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