NEW YORK-BASED AIG & THEIR EXECUTIVES FACE MULTI-BILLION DOLLAR LAWSUIT FILED IN CHICAGO'S FEDERAL COURTHOUSE BY MUTUAL FUNDS FOR SECURITIES FRAUD

NEW YORK-BASED AIG & THEIR EXECUTIVES FACE MULTI-BILLION DOLLAR LAWSUIT FILED IN CHICAGO'S FEDERAL COURTHOUSE BY MUTUAL FUNDS FOR SECURITIES FRAUD

By Andrew Harris August 07, 2013 Bloomberg

Twenty-five Nuveen Investments Inc. funds sued American International Group Inc. (AIG), claiming the company and executives committed securities fraud leading to the U.S. financial crisis that intensified in 2008.

Also named yesterday as defendants in a 237-page complaint in federal court in Chicago were former Chief Executive Officer Martin J. Sullivan, ex-Chief Financial Officer Steven Bensinger and Joseph Cassano , who led the AIG Financial Products unit.

“Plaintiffs suffered tens of billions of dollars in losses, at least, based on false and materially misleading statements that AIG, certain of its executives, directors, underwriters and outside auditor made,” according to the complaint.

The funds accused the company, Sullivan and others of violating Illinois and federal securities laws, common law fraud and unjust enrichment. They asked for unspecified money damages.

Matthew Gallagher, a spokesman for New York-based AIG, declined to comment immediately on the allegations.

Nuveen Investments is based in Chicago. Among funds suing the insurer are the Dow 30 Enhanced Premium and Income Fund , the Nuveen Equity Premium Opportunity Fund (JSN) and the Nuveen Large Cap Value Fund. (NNGAX)

Each bought AIG securities at allegedly inflated prices that fell “when the truth was disclosed,” according to the complaint.

The case is Dow 30 Enhanced Premium & Income Fund v. American International Group Inc., 13-cv-05612, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net .

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net .