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Federal Judge Won't Dismiss Class Action Suit Against AIG

Posted on 28 Sep 2010

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On Monday a federal judge refused to dismiss a class-action lawsuit accusing American International Group Inc (AIG) of misleading investors about its exposure to subprime mortgages, which led to a liquidity crisis and $182.3 billion of federal bailouts.

U.S. District Judge Laura Taylor Swain said the plaintiffs alleged facts "giving rise to a strong inference of fraudulent intent" in how AIG communicated publicly about the risks in its portfolio of credit default swaps.

The lawsuit covers investors who owned AIG securities between March 16, 2006, and September 16, 2008, when AIG received its first bailout.