American International Group shareholders hoping to hold executives at the firm responsible for the insurer’s near-collapse were told they did not have a case yesterday.
A Manhattan federal judge dismissed the shareholder lawsuit, which accused current and former AIG executives and directors of ignoring "red flags,'' that caused the insurer's financial failures and resulted in $180 billion of federal bailouts. The suit accused AIG officials of disregarding the potential for catastrophic losses stemming from exposure to credit default swaps.
U.S. District Judge Laura Taylor Swain on Tuesday reportedly stated that she accepted AIG's argument that shareholders led by the Louisiana Municipal Police Employees' Retirement System pension fund failed to first ask its board of directors to take action or show why such a demand would have been wasted effort.
AIG spokesman Mark Herr said the New York-based company was pleased with the 44-page ruling.
The complaint sought remedies on behalf of AIG, including restitution and ''extraordinary'' equitable relief.