AIG investors' $970.5 million settlement wins U.S. court approval
By Nate Raymond and Brendan Pierson
NEW YORK (Reuters) - American International Group Inc (AIG.N: Quote) shareholders won approval on Friday of a $970.5 million settlement resolving claims they were misled about its subprime mortgage exposure, leading to a liquidity crisis and $182.3 billion in federal bailouts.
U.S. District Judge Laura Taylor Swain in Manhattan granted final approval at a hearing to what lawyers for the investors call one of the largest class action settlements to come out of the 2008 financial crisis.
It marks the largest shareholder class action settlement in a case where no criminal or regulatory enforcement actions were ever pursued, the plaintiffs' lawyers have said.
AIG said it was pleased with the judge's order.
The U.S. Justice Department and U.S. Securities and Exchange Commission closed related probes involving AIG in 2010.
Swain noted on Friday that no potential class member had objected to the terms of the deal, which she said was strong evidence that it was "fair, reasonable and adequate" and should be approved. She added that the amount was "very substantial" and that shareholders would face significant risk if they continued to litigate instead of settling.
The settlement covers investors who bought AIG securities between March 16, 2006, and Sept. 16, 2008, when the company received its first bailout.
Swain overruled an objection by two people who bought AIG shares before the beginning of that period and said they should be included in the class. Continued...