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May 20, 2009 at 08:00 PM
WASHINGTON — The U.S. District Court in New York has approved an $843 million distribution to American International Group Inc. investors.
The distribution will compensate about 257,000 investors for misleading financial statements AIG issued from 2000 to 2005, according to officials at the U.S. Securities and Exchange Commission.
Teams at the SEC, the New York state attorney general’s office, the New York State Insurance Department, the U.S. Department of Justice and the U.S. Postal Inspection Service participated in the investigation.
Representatives for AIG, New York, declined to comment on the distribution approval.
The investigation started with a federal and state review of two reinsurance transactions that AIG entered into with General Reinsurance Corp., Stamford, Conn.
Regulators say the Gen Re transactions had no economic substance and were designed to help AIG add $500 million in loss reserves to its balance sheet in the fourth quarter of 2000 and the first quarter of 2001.
Several Gen Re executives recently were sentenced to prison following a trial in Connecticut involving charges stemming from their role in the transactions.
