From today's New York Times:
American International Group, the troubled insurance giant, has agreed to pay $725 million to settle a long-running securities fraud lawsuit led by three Ohio public pension funds in one of the largest settlements of a class-action case ever in the United States.
Under terms announced Friday, A.I.G. would pay $175 million within 10 days of preliminary court approval of the settlement with a class of shareholders. The company may fund the remaining $550 million through one or more common stock offerings.
The litigation, which began in October 2004, involved allegations that A.I.G. engaged in accounting fraud, bid-rigging and stock price manipulation, said Attorney General Richard Cordray of Ohio, who represented the state’s funds.
The settlement resolves allegations of wide-ranging fraud from October 1999 to April 2005 and brings the expected recovery for A.I.G. shareholders to about $1 billion, Mr. Cordray said.
A.I.G. said it was “pleased to have resolved this matter.”
Well, yes. The settlement figure (which OS refers to as the 'GoAwayNumber'--you cough this up, and we'll get our clients to go away...) was still in the range of 'just the cost of doing business'. The fraud allegations date back to 1999!
1999! Can you say, 'Justice delayed? I knew you could!'
OS suspects that the only cash that will come the way of those pension funds will be from that initial $175 million payout, a great deal of which will go to attorney's fees. AIG will never get around to that stock offering, and the pension funds won't have the muscle, either financial or political, to enforce the remainder of the settlement. It's AIG, after all. They'll pay off the lawyers, and issue an IOU to the pension funds. The State of Ohio will end up having to make the funds whole, somehow.
If we had an honest Justice Department, the perp-walks and plea bargains would have occurred long ago, followed by the civil settlements. That used to be how these things worked. Crooks went to jail, companies paid settlements, and fired the execs who cost the stockholders their wealth. And then sued them.
If we had an honest Justice Department, that is.
They're too busy suing Arizona to give a thought about teacher pensions in Ohio.
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