WASHINGTON BUREAU — A financial planner filed a suit in California state court Thursday against American International Group Inc.
The planner, Linda Harris, president of Independent Financial Planning Group Inc., La Quinta, Calif., alleges in the suit that AIG, New York, engaged in unfair business practices by using securities in its life subsidiaries to collateralize trading in derivatives.
The suit, filed in Los Angeles Superior Court, charges that AIG used funds from California-based life insurance companies to support securities trading while telling brokers and policyholders that the insurance business was insulated from losses in the financial derivatives market.
The lawsuit alleges that such trading activities put policyholders at risk of losing their savings. The suit alleges that Harris and her company bought and sold more than $15 million of AIG life insurance.