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Administration April 4, 2011
AIG Stock Drop Claims Survive Dismissal Attempt
April 4, 2011 (PLANSPONSOR.com) – American International Group (AIG) must face some claims by current and former employees that it invested their retirement funds too heavily in company stock, according to Bloomberg.
Reported by Fred Schneyer
A news account said U.S. District Judge Laura Taylor Swain ruled AIG and some directors, including former board member and Chief Executive Officer Martin must defend allegations of breach of fiduciary duty in a lawsuit filed in 2008. She dismissed claims by participants in a Puerto Rican unit’s retirement plan.
According to the Bloomberg report, the judge said the remaining plaintiffs can try to prove that they sustained losses to their employee pension plans because the defendants breached their duty by continuing to invest in New York-based AIG in the face of risks the company was facing. The shares fell 97% in 2008.
“Plaintiffs have sufficiently alleged that AIG and the director defendants were aware of the increasingly risky financial position maintained by AIG, material weaknesses in AIG’s financial health and the potential impending erosion of the value of AIG’s stock,” Swain wrote, according to Bloomberg.
Mark Herr, an AIG spokesman, said in an e-mail to Bloomberg: “We’re pleased the court dismissed portions of the case and will defend vigorously against the remaining claims.”