Modern Business

U.S. insurance giant, AIG, has agreed to pay 725 million dollars to settle fraud charges brought by the three markets pension fund Ohio, the state attorney general said Friday.

“The settlement of fraud charges AIG covers many things from October 1999 until April 2005 that involves the division of anti-market competition, violation of accounting and stock price manipulation,” attorney general Richard Cordray’s office said in a statement quoted by AFP.

Cordray declared a class action settlement a victory for “teachers, firefighters, police, and civil servants,” who “harmed” by AIG’s mistakes.

The company was accused of accounting fraud designed to boost AIG’s reserves to cover claims, the scheme of bid-rigging by insurance brokers and executives ordered traders to inflate AIG’s stock price. Cordray said that it is a class-action securities settlement 10th-largest in U.S. history. This is the latest blow to a company that requires nearly 70 billion dollar government bailout to stay afloat after the sub prime mortgage crisis.

Harvey Golub earlier this week resigned as chairman of the board, amid rumors of discord between the top executives at the company. If a fine win court approval, that means investors AIG has the right a little more than a billion dollars in compensation, including a settlement with the partners of AIG, General Reinsurance Corporation, PricewaterhouseCoopers and former AIG CEO Maurice “Hank” Greenberg, the statement said.