Friday, September 19, 2008

Pension fund sues AIG

The chief executive of American International Group (AIG) is being sued by The City of New Orleans Employees' Retirement System for shareholder losses, which it alleges are the result of imprudent risk taking and mismanagement.

The public pension fund is seeking the return to AIG of all compensation paid to the CEO and directors, among other damages.

The suit said directors were “ill-prepared to monitor AIG's submersion into the sub-prime market and unduly heavy investments in credit derivatives, a business strategy that blew up in their faces.

The lawsuit followed another claim involving AIG and the Teachers Retirement System of Louisiana.

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