Three Ohio pension funds reached a settlement in a securities litigation case against American International Group Inc., with AIGs independent auditor, PricewaterhouseCoopers, agreeing to pay the funds $97.5 million.
PwC was alleged in the lawsuit to have violated securities laws by issuing unqualified audit opinions on the insurers financial statements in the class-action period. The Ohio attorney generals office prosecuted the case on behalf of the $78 billion Ohio Public Employees Retirement System, the $70 billion Ohio State Teachers Retirement System and the $11 billion Ohio Police & Fire Pension Fund, all of Columbus. The funds were the lead plaintiffs in the class-action suit. The suit sought damages for investors who purchased AIG securities between Oct. 28, 1999, and April 1, 2005. The suit was filed in 2005.
Thomas Dubbs, a senior partner at Labaton Sucharow LLP, a New York-based law firm that represented the pension funds, said the settlement is the eighth largest from an auditing firm in securities class-action history.
On behalf of the class, we are pleased to obtain such an excellent result, Mr. Dubbs said in a phone interview.
This important settlement represents a tremendous result for investors, Chris Geidner, principal assistant attorney general said in a news release announcing the settlement.
Steven Silber, a spokesman for PricewaterhouseCoopers, said the firm decided to settle the case at this stage to avoid the enormous litigation cost that would be incurred if the case continues against the firm, while at the same time eliminate any potential exposure. He added that the settlement does not contain an admission of wrongdoing by the firm and we continue to believe that our work was in accordance with professional standards.
Representatives from AIG did not return phone calls seeking comment by press time.