NU Online News Service, Oct. 6, 11:17 a.m.EST

A federal court judge has preliminarily approved a $725 millionsettlement agreement announced more than a year ago to resolve asecurities class-action lawsuit between American InternationalGroup Inc. (AIG) and Ohio and Florida public pension planfunds.

If the settlement gains final approval, the more than 7-year-oldlawsuit over bid-rigging allegations would be put to rest.

The funds allege the actions of current and former officers ofAIG and other companies—including former AIG chief executiveMaurice “Hank” Greenberg's C.V. Starr & Co.—engaged inunethical conduct that plummeted AIG's stock price.

The journey to final settlement approval marks another attemptby AIG to put its past behind it.

“With this and other legacy matters behind us, we are betterable to focus our efforts on taxpayers recouping their investmentin AIG and restoring the value of our franchise for the benefit ofour stakeholders,” says AIG spokesman Mark Herr in an email.

AIG is also working to gain final approval of a $450 million settlement with insurers in a case involving AIG'salleged underreporting of premiums to a workers' compensationprogram. AIG has alleged the same against the insurers suingit.

The preliminary approval order of the $725 million settlementsigned by District Court Judge Deborah A. Batts in the SouthernDistrict of New York says the settlement class is made up of allpeople and entities who acquired AIG securities from Oct. 28, 1999through April 1, 2005, as well as stockholders of HSB Group andAmerican General Corp. at the time they was acquired by AIG.

A “fairness hearing” is scheduled for Jan. 31, 2012 to determinewhether the proposed settlement is fair, reasonable andadequate—and in the best interest of the class.

In August 2009, Greenberg, along with some other former AIGexecutives, C.V. Starr and Starr International, reached a $115 million settlement with the Ohio plaintiffs.

The plaintiffs have also obtained a $72 million settlement withGeneral Reinsurance and $97.5 million fromPricewaterhouseCoopers.

The groups were accused of engaging in anti-competitive conductthrough the alleged payment of contingent commissions to brokersand participation in illegal bid-rigging. AIG and others were alsoaccused of inflating earnings and misleading investors aboutgovernment investigations.