American International Group Inc. agreed on July 16 to pay $725 million to settle a lawsuit brought by three Ohio pension funds in 2004 for accounting fraud, bid-rigging and stock price manipulation. An investigation of the funds unearthed a variety of accounting irregularities.
"No privileged few are entitled to play by different rules than the rest of us," Ohio Attorney General Richard Cordray said during a news conference.
The first $175 million is due within 10 days of the settlement. To pay the remainder of the settlement, AIG intends to raise money by selling its common stock. If AIG fails to collect the $550 million before the court approves the settlement, the plaintiffs may terminate the agreement and elect to acquire freely transferable shares of AIG common stock, Cordray said in a statement.
"This settlement ends a long-standing lawsuit, allowing AIG to continue to focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders," AIG spokesman Mark Herr said in a statement.