US - Attorney General Jim Petro has filed a lawsuit against former American International Group CEO Maurice R "Hank" Greenberg and his wife in order to put a hold on the transfer of more than 41m shares of AIG stock he gave her as a gift two days before stepping down from his position.
The new suit is related to the securities class action Petro is already prosecuting on behalf of three Ohio pension funds and AIG investors. The market value of the shares at the date of transfer has been put at more than $2.6bn
“We are seeking to stop this suspect transaction of a large block of stock and put it under the control of a receiver until the end of the case,” Petro said in a statement. “This action by the Ohio pension funds represents a new chapter in our vigorous efforts to obtain compensation for investors as well as to institute appropriate corporate governance reforms at AIG.”
The Ohio Public Employees Retirement System (OPERS), the State Teachers Retirement System of Ohio (STRS Ohio) and Ohio Police & Fire Pension Fund are lead plaintiff in the securities class action suit that alleges AIG engaged in “bid-rigging” and other fraudulent behaviour costing combined losses to the funds of US$70-75m.
The previous class action is currently pending in the US District Court for the Southern District of New York, where the new suit was filed this week.
The new action is brought under the New York Fraudulent Conveyance Statute and seeks to both annul the transfer of the shares as well as to appoint a receiver who will retain custody of the shares until the end of the class action lawsuit.
According to the Securities and Exchange Commission, Greenberg transferred more than 41m shares of AIG common stock to his wife on March 11, after he was named as a defendant in the class action suit.
Hahn Loeser & Parks, LLP is assisting Petro in representing the pension funds.
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