Action Against AIG Over MBS, CDS Stays Alive

Law360, New York (September 27, 2010, 6:43 PM EDT) -- American International Group Inc. failed Monday to quash a consolidated class action that accuses the company and several of its directors of misleading investors about its exposure to mortgage-backed securities and credit default swaps.

Judge Laura Taylor Swain tossed AIG's dismissal bid, saying the plaintiffs had stated facts "giving rise to a strong inference of fraudulent intent," according to the opinion filed with the U.S. District Court for the Southern District of New York.

The proposed class bought up to $500 million of medium-term notes that...
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