US - Maurice "Hank" Greenberg, the former chief executive of American International Group (AIG), and five other defendants agreed to pay US$115m to settle a class action suit brought by three Ohio pension funds.
The suit alleged the insurer defrauded investors through "anti-competitive practices, such as market division through the use of undisclosed contingent commissions and bid-rigging," and an accounting fraud that led to a $3.9bn restatement of the company's filings, Ohio state attorney general Richard Cordray said.
Cordray announced last week that he had reached an agreement in principal with Greenberg, former chief financial officer Howard Smith, and others marking the third agreement reached in AIG related cases on behalf of the pension funds.
Cordray is litigating the class action suit on behalf of Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, the Ohio Police and Fire Pension Fund and other investors in AIG between October 28, 1999 and April 1, 2005.
"AIG cannot be permitted to defraud investors and other companies who play by the rules. This agreement in principle will help compensate investors - including Ohio pension funds - who were harmed by AIG's misconduct," he said.
The agreement needs to be approved by the pension funds at their August meetings.
Earlier in the month, the Securities and Exchange Commission announced that it reached a $16.5m agreement combined with Greenberg and Smith to settle charges of accounting violations at AIG.
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