Four years into a securities fraud case against insurance giant American International Group Inc., the unthinkable happened. The financial system — and the target company, which had bet unwisely on credit default swaps — collapsed. The government was forced to bail out both, and wound up controlling 80% of AIG.
“We had a defendant unlike any other in securities class action history — a company that economically was troubled but coming back, and recipient of billions in taxpayer aid and effectively owned by the government. We’ve never seen anything like that,” said Thomas Dubbs of New York’s Labaton Sucharow.
