A Collaboration with the University of Pittsburgh

Insurance giant AIG settles fraud case for $1.6 billion

[JURIST] American International Group (AIG) [corporate website], one of the world's largest insurance companies, has agreed to pay $1.64 billion to settle [agreement text, PDF] fraud, bid-rigging and improper accounting charges, New York Attorney General Eliot Spitzer [official website] announced [press release] on Thursday. The settlement, which does not include former chairman and CEO Maurice "Hank" Greenberg [Wikipedia profile], ends civil litigation against the insurance company filed by the New York Attorney General's Office, the New York State Insurance Department and the US Department of Justice [official website], and will distribute money to investors, policyholders, and other injured states as well as the named plaintiffs.

As part of the pact, the US Securities and Exchange Commission [official website] also settled [press release] with AIG for $800 million. The charges alleged that AIG made multi-million dollar transactions with Gen Re [corporate website] insurance group, a subsidiary of Berkshire Hathaway [corporate website], to improve the company's appearance of profitability. AP has more.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.