Last month, Southern District Judge Deborah Batts approved a $115 million settlement to end a securities fraud class action that American International Group Inc. (AIG) shareholders brought against the company’s former CEO, Maurice "Hank" Greenberg, and other AIG executives.1 Although New York Attorney General Eric Schneiderman has also sued Greenberg (for the same transactions that attracted AIG shareholders’ ire), he had little reason to celebrate the private plaintiffs’ victory. That is because, as he forcefully argued in the objection that he presented to Batts, the settlement dramatically limits the relief the attorney general is able to win in his own lawsuit.2
The private plaintiffs’ win comes at the attorney general’s expense due to the confluence of two recent New York Court of Appeals decisions. The first clarified that private litigants and the attorney general could both litigate their claims against Greenberg at the same time (a question that was previously in doubt).3 The second case suggested that whichever party wins (or settles) first will have the exclusive right to recover restitution.4
