Southern District Judge Laura Taylor Swain (See Profile) has dismissed claims that AIG’s offering materials for sales of common stock from 2006 to 2008 misstated its credit risk. The judge ruled in In re American International Group 2008 Securities Litigation, 08 Civ. 4772, that the plaintiffs and their counsel at Barrack Rodos & Bacine failed to meet their burden of showing that AIG disbelieved the alleged misstatements at the time they were made.
Barrack Rodos sued AIG and its directors and officers in 2008, soon after the company had to take a $170 billion bailout from the U.S. government. Investors alleged that AIG and its executives made untrue statements about the company’s credit risk and MBS exposure in its offering materials, which is a strict liability offense under §11 of the Securities Act of 1933. The plaintiffs also alleged securities fraud under Section 10(b) of the Securities Exchange Act of 1934.
