This is a securities class action lawsuit against AIG; certain officers and directors; and certain underwriters in connection with AIG's issuance of specific securities over the last two years.
Until an unprecedented federal government bailout of AIG in September of 2008, AIG stood as the world's largest insurer. A self-proclaimed pioneer in the field, AIG consistently touted its role as an industry leader in issuing a quasi-insurance product known as a super senior credit default swap ("CDS"). A CDS is a derivative instrument purchased by investors seeking to hedge exposure to default on increasingly complex debt instruments. Over the past several years, AIG sought to capitalize on the growing market for CDSs, assuring investors that AIG's expertise and careful management of its CDS portfolio ensured a virtually risk-free profit center for AIG even in the harshest of market conditions.
Increased defaults on the complex debt instruments tied to the CDSs prompted AIG's CDS counterparties to question AIG's valuations.
Unbeknownst to investors, many of these counterparties began demanding that AIG post billions in collateral under the terms of the CDSs. Although never truthfully disclosed to investors, escalating collateral calls and plunging CDS valuations began to threaten AIG's liquidity and financial position, prompting AIG to seek tens of billions in dollars from the investing public in an attempt to stave off the pending calamity brewing at the Company's financial products division that sold the CDSs. As it did so, AIG and the defendants in this action -including the professional gatekeepers who received hundreds of millions of dollars in fees for their role in garnering tens of billions of dollars from the investing public- failed in their obligation to ensure the accuracy of AIG's public filings.
When the true extent of AIG's imperiled financial condition began to be revealed, the securities identified herein plunged in value. This action seeks to recover the losses investors suffered as a result. The SEC mandated wriiten materials that memorialize the securities AIG issued contained untrue statements of material fact and material omissions. Among other things, these Offering Materials failed to disclose:
(1) AIG's massive liability and exposure to credit default swaps ("CDSs");
(2) AIG misstated its financial condition, including its quarterly and annual earnings and other financial results, based on an overvaluation of the CDS portfolio;
(3) AIG misrepresented AIG's liquidity and capital position by failing to disclose collateral calls from CDS counterparties or incorporate the impact of the collateral calls on AIG's financial position;
(4) AIG misrepresented the adequacy and integrity of AIG's internal controls over financial reporting; and
(5) AIG failed to disclose investigations into AIG's practices by regulatory authorities regarding AIG's accounting, valuation and disclosure of its CDS portfolio.
Later revelations concerning AIG's true financial condition harmed investors by causing a significant decline in the value of the securities purchased in or traceable to the above-listed offerings.
Plaintiffs bring this action to recover these damages under the Securities Act. The securities at issue are: American International Group 6.25% Series A-1 Junior Subordinated Debentures Due 3/15/2037 (026874BE6); American International Group Medium-Term Notes Series MP 4.95% Due 3/20/2012 (02687QBL1); American International Group Medium-Term Notes Series MP Floating Rate Due 3/20/2012 (02687QBK3); American International Group Medium -Term Notes Series MP 5.45% Due 5/18/2017 (02687QBW7); American International Group 6.45% Series A-4 Junior Subordinated Debentures Due 6/15/2077 (026874800); American International Group Medium -Term Notes Series MP 5.45% Due 5 /18/20179 (02687Q13W7); American International Group Medium - Term Notes Series G 5.85% Due 1/16/2018 (02687QDG0); American International Group 7.7% Series A-5 Junior Subordinated Debentures Due 12/18/2062 (026874859); American International Group Series B-I Junior Subordinated Debentures Due 2/15/2041 (026874115) ; American International Group Series B-2 Junior Subordinated Debentures Due 5/11/2041 (026874115); American International Group Series B-3 Junior Subordinated Debentures Due 8/l/2041 (026874115)
Name (Stock Symbol)
American International Group (AIG) (AIG)
American International Group, Inc. (AIG), provides insurance and financial services with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. AIG also sold credit derivative swaps, effectively insuring certain corporate obligations and asset backed securities against default. The US government has injected over $160 billion into AIG and owns 80% of AIG stock.
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