European Investors Launch AIG Fraud Suit Over CDO Bets

Law360, New York (June 12, 2012, 6:28 PM EDT) -- A slew of European institutional investors on Monday unleashed a new securities suit in New York against American International Group Inc. for allegedly covering up its disastrous bets in the subprime mortgage market.

In a complaint filed in New York federal court, the British Coal Staff Superannuation Scheme and seven other European institutional investors claim AIG's profit-driven, bonus-obsessed culture prevented proper risk analysis of lucrative credit-default swaps contracts tied to the subprime mortgage market. AIG executives also failed to warn its common stock investors after realizing...
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