Participants in the American International Group employee savings plan have filed a prospective class-action suit against the insurer, alleging that illegal acts by management hurt their investment.
The suit on behalf of beneficiaries of the AIG 401(k) savings plan was announced by the Coral Springs, Fla.-based law firm Mager White & Goldstein LLP.
According to a complaint filed in New York’s U.S. District Court in Manhattan, AIG violated the Employee Retirement Income Security Act (ERISA), decreasing the value of AIG stock held by current and past employees of AIG through the plan. AIG declined to comment on the litigation.
The suit alleges that AIG’s financial officers breached their fiduciary responsibilities by leading participants to invest in AIG stock between Nov. 1, 1998, and the present, while failing to disclose improper business practices. The suit also charges that AIG officers disseminated false and misleading financial statements to investors.
Specifically, the lawsuit stated that since February 2005, AIG has admitted to accounting errors in several areas of AIG’s operations that falsely gave the appearance of financial growth.
As a result, AIG has delayed issuance of its 2004 annual report. AIG also has admitted that it anticipates cutting its net worth by over $2 billion and restating its financial results for the period 2000 through 2004, the lawsuit noted.
AIG has been the target of a number of class-action lawsuits in recent months. Late last year, two law firms–Wolf Haldenstein Adler Freeman & Herz LLP, and Stull, Stull & Brody–separately filed class actions against the insurance giant on behalf of shareholders.
In February, Ohio Attorney General Jim Petro retained two law firms–Hahn Loeser & Parks LLP, and Goodkind Labaton Rudoff & Sucharow LLP–to assist him in representing Ohio’s retirement systems as lead plaintiff in a class action against AIG.
In related news, a spokesperson for Maurice Greenberg, the ousted chairman and chief executive of AIG, said movers had finished retrieving a number of personal effects the company had been keeping from him. “We received most of Mr. Greenberg’s belongings. We are still awaiting his personal art collection,” said his representative, Howard Opinsky.
The art in question involves items owned by CV Starr, an insurance underwriter, and Starr International Company–two firms with links to AIG that are controlled by Mr. Greenberg. Mr. Opinsky said the disputed material at AIG’s Pine Street headquarters in New York includes an oil painting by the impressionist master Vincent Van Gogh.
Mr. Greenberg had threatened to sue the company he headed for more than three decades. AIG had been keeping the materials after Mr. Greenberg left his post amid a variety of investigations into company activity by various agencies.
The suit alleges that AIG’s financial officers breached their fiduciary responsibilities by leading participants to invest in AIG stock