Late last week, Michigan Attorney General Mike Cox announced that the State of Michigan will be the lead plaintiff in a class action lawsuit against AIG. The company–which is now largely owned by the government–lost considerable value after it was revealed that it was conducting risky financial transactions whose true value was disguised.
Michigan’s pension system was invested in AIG and the Attorney General is hoping to recover lost value.
In a press release announcing the lawsuit, the Michigan Attorney General’s office wrote:
“AIG is one of the world’s largest insurance and financial service companies. The class action suit alleges that between November 10, 2006 and June 6, 2008, AIG mislead investors of the true value of Credit Default Swaps, which were securities tied to sub-prime mortgages. When the true value was revealed in 2008, AIG’s stock plummeted from more than $70 per share in 2007 to about $1 per share today.
As lead plaintiff, Michigan will manage the litigation on behalf of a class of AIG stock and bond holders, negotiate potential settlement terms, and seek to maximize the recovery for the class. If the case goes to trial, the lead plaintiff will lead all strategy decisions.”
Michigan is also the lead plaintiff in a similar lawsuit against Bear Stearns.