AIG to pay US$960 mil. to settle shareholder lawsuits
August 6, 2014, 12:00 am TWN
NEW YORK--American International Group Inc. said Monday it has agreed to pay US$960 million to settle shareholder claims that the company misled investors.
The settlement stems from several class-action lawsuits claiming that AIG executives gave false and misleading information about the insurer's health, including its exposure to the risky home loans that triggered the mortgage crisis.
Last month, AIG and the plaintiffs accepted a mediator's proposal to settle the consolidated lawsuits for US$960 million in cash, the company said in a filing with the Securities and Exchange Commission.
The deal must still be approved by the court.
The settlement is the latest step by AIG to move beyond its troubled years following the financial crisis in 2008.
The New York company got one of the biggest bailouts of the financial crisis but subsequently repaid the money and underwent a massive restructuring, shrinking its size by more than half to focus on its core insurance business.
AIG also reported Monday that its net income jumped 13 percent in its second quarter, topping analysts' expectations.
In the April-June quarter, AIG's net income surged to US$3.07 billion, or US$2.10 per share, from US$2.73 billion, or US$1.84 per share, in the same quarter a year earlier.
Earnings, adjusted for non-recurring items and to account for discontinued operations, came to US$1.25 per share. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of US$1.05 per share.
The latest results included a US$1.4 billion after-tax gain on the sale of its airplane leasing unit, International Lease Finance Corp.
American International Group shares added 2.5 percent to US$54 in after-hours trading Monday. They ended up 61 cents at US$52.66 in regular trading.
The shares have risen 3.2 percent since the beginning of the year, while the Standard & Poor's 500 index has increased 4.9 percent.