American International Group Inc. has agreed to pay $725 million to settle an ongoing legal dispute with Ohio public pension funds, which accused the insurance giant in 2004 of anti-competitive activity, accounting violations and manipulating stock price. This deal represents one of the largest securities class-action lawsuit payouts in U.S. history.

"Ohio is determined to send a strong message to the marketplace that companies who don't play by the rules will pay a steep price," said the state's Attorney General Richard Cordray, in a statement announcing the settlement.

According to the original complaint in the class-action lawsuit, the Ohio pensions were accusing the company (NYSE: AIG) of "employing devices, schemes and artifices to defraud." Cordray represented three state pension funds: the Ohio Public Employees Retirement System; State Teachers Retirement System of Ohio, and Ohio Police and Fire Pension Fund -- collectively representing more 1.1 million members. The lawsuit sought damages for AIG investors who purchased shares between Oct. 28, 1999, and April 1, 2005.

Cordray said this is the tenth-largest securities class-action settlement ever in the United States and, combined with earlier settlements from other companies, will total more than $1 billion.

"We are pleased to have resolved this matter," said company spokesman Mark Herr. "This settlement ends a long-standing lawsuit, allowing AIG to continue to focus its efforts on paying back taxpayers and restoring the value of our franchise for the benefit of all our stakeholders."

AIG will -- once the settlement receives its approvals in court -- initially pay $175 million, with the balance coming from money raised in a future stock offering or actually paid with shares of stock.

Cordray had already settled claims against two other defendants in this case, PricewaterhouseCoopers LLP ($97.5 million) and General Reinsurance Corp. ($72 million). The Ohio Attorney General's office also negotiated a $115 million settlement with AIG's former chief executive officer, Maurice "Hank" Greenberg, and three other former executives from AIG in the suit (BestWire, Aug. 14, 2009).

By: Robin Zygelman

Cat insurance can actually save the life of your pet. Even if you have an indoor cat, she might get sick at one time or another and need extensive vet care. If you do not have animal insurance and cannot afford the care, you may end up having to put the cat down. Your cat depends on you to take care of her and take her to the vet when she is sick. Many people do not realize how valuable animal insurance can be, but it is something that ever pet owner should have.

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