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Only the Westlaw Citation Is Currently Available. United States District Page 1 Slip Copy, 2010 WL 3768146 (S.D.N.Y.) (Cite as: 2010 WL 3768146 (S.D.N.Y.)) York, NY, for Defendant Robert E. Lewis. Only the Westlaw citation is currently available. Weil, Gotshal & Manges, LLP, by: Joseph S. Aller- United States District Court, hand, Esq., New York, NY, for the Defendant Dav- S.D. New York. id L. Herzog. In re AMERICAN INTERNATIONAL GROUP, INC.2008 SECURITIES LITIGATION. Milbank, Tweed, Hadley & McCloy LLP, by: An- This Document Relates To: All Actions. drew E. Tomback, Esq., Dorothy Heyl, Esq., Tam- Master File No. 08 Civ. 4772(LTS). ieka Spencer Bruce, Esq., New York, NY, for De- fendant Alan Frost. Sept. 27, 2010. Latham & Watkins LLP, by: Richard D. Owens, Barrack, Rodos & Bacine, by: Leonard Barrack, Esq., David M. Brodsky, Esq., Lillian E. Gutwein, Esq., Jeffrey W. Golan, Esq. (pro hac vice), M. Esq., New York, NY, for Defendant Andrew For- Richard Komins, Esq., Robert A. Hoffman, Esq., ster. Lisa M. Lamb, Esq., Julie B. Palley, Esq., Phil- adelphia, PA, A. Arnold Gershon, Esq., Regina M. Gibson Dunn & Crutcher LLP, by: Lee G. Dunst, Calcaterra, Esq ., New York, NY, The Miller Law Esq., Jim Walden, Esq., Georgia K. Winston, Esq., Firm, P.C., by: E. Powell Miller, Esq. (pro hac Julie I. Smith, Esq., New York, NY, for Defendant vice), Marc L. Newman, Esq. (pro hac vice), David Joseph Cassano. H. Fink, Esq., Jayson E. Blake, Esq., Brian E. Et- zel, Esq., Rochester, MI, for Lead Plaintiff, State of Paul, Weiss, Rifkind, Wharton & Garrison LLP, by: Michigan Retirement Systems, and Lead Counsel Richard A. Rosen, Esq., Brad S. Karp, Esq., New for the Putative Class. York, NY, Charles E. Davidow, Esq., Washington, D.C., for the Underwriter Defendants. Weil, Gotshal & Manges LLP, by: Joseph S. Aller- hand, Esq., Robert F. Carangelo, Esq., Paul Dutka, Cravath, Swaine & Moore LLP, by: Thomas G. Esq., Stacy Nettleton, Esq., New York, NY, for De- Rafferty, Esq., Antony L. Ryan, Esq., Samira Shah, fendant American International Group, Inc.¿ Esq., New York, NY, for Defendant Pricewater- houseCoopers LLP. Mayer Brown LLP, by: Richard A. Spehr, Esq., Joseph De Simone, Esq., S. Christopher Proven- Weil, Gotshal & Manges, LLP, by: Joseph S. Aller- zano, Esq., Bradford Jealous, III, Esq., New York, hand, Esq., Robert F. Carangelo, Esq., Stacy NY, for Defendant Steven J. Bensinger. Nettleton, Esq., New York, NY, for Defendant Ed- mund S.W. Tse. Akin Gump Strauss Hauer & Feld LLP, by: James A. Diehl, Esq., David M. Murphy, Esq., Richard B. Simpson Thacher & Bartlett LLP, by: James G. Zabel, Esq., One Bryant Park, New York, NY, Gamble, Esq., New York, NY, for the Outside Dir- Wachtell, Lipton, Rosen & Katz, by: David M. ector Defendants. Murphy, Esq., Meredith L. Turner, Esq., New York, NY, for Defendant Martin Sullivan. OPINION AND ORDER Wilkie Farr & Gallagher LLP, by: Michael R. Young, Esq., Antonio Yanez, Jr., Esq., Mei Lin LAURA TAYLOR SWAIN, District Judge. Kwan-Gett, Esq., Brian R. Faerstein, Esq., New © 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. Page 2 Slip Copy, 2010 WL 3768146 (S.D.N.Y.) (Cite as: 2010 WL 3768146 (S.D.N.Y.)) *1 Lead Plaintiff State of Michigan Retirement LLP (“PwC”) for alleged violations of Section 11; Systems, as custodian of the Michigan Public (vi) against the Underwriter Defendants for alleged School Employees Retirement System, the State violations of Section 12(a)(2) of the Securities Act, Employees Retirement System, the Michigan State 15 U.S.C. § 77l(a)(2) (“Section 12(a) (2)”); and Police Retirement System, and the Michigan Judges (vii) against the Executive Defendants for alleged Retirement System (“Lead Plaintiff”), brings this violations of Section 15 of the Securities Act, 15 action on behalf of a putative class of investors U.S.C. § 77o (“Section 15”). The Court has juris- (“Plaintiffs”) who purchased or otherwise acquired diction of the claims pursuant to 28 U.S.C. § 1331. publicly traded securities issued by American Inter- national Group, Inc. (“AIG” or the “Company”), FN1. On July 16, 2009, the Court severed between March 16, 2006, and September 16, 2008 the claims against defendant Thomas Ath- (the “Class Period”). Plaintiffs principally allege an. Lead Plaintiff and Athan entered into a that Defendants violated the federal securities laws tolling agreement on July 27, 2009. (See by materially misstating the extent to which AIG docket entry nos. 109, 115, 116.) had accumulated exposure to the subprime mort- Plaintiffs group the defendants in the following gage market through its securities lending program manner in the Complaint, and the Court uses the and its credit default swap (“CDS”) portfolio. That same nomenclature for the purposes of this opinion: exposure, which placed the Company at risk in Sullivan, Bensinger, Cassano, Forster, Herzog and ways that Defendants allegedly declined to dis- Lewis are named as the “Section 10(b) Defend- close, ultimately led to a liquidity crisis that re- ants.” (CCAC ¶ 50.) All of the Section 10(b) De- quired an unprecedented bailout by the United fendants occupied executive-level positions at the States Government. Company and were privy to material non-public in- Plaintiffs assert claims under the federal securities formation concerning AIG and AIGFP. (CCAC ¶ laws against AIG and various current or former 553.) Moreover, Plaintiffs allege, all of the Section AIG executives, directors, accountants, and under- 10(b) Defendants “prepared, approved, signed, and/ FN1 writers (collectively, “Defendants”). Specific- or disseminated” the documents and statements that ally, in the Consolidated Class Action Complaint contain the material misstatements and omissions (“CCAC” or “Complaint”), Plaintiffs assert the fol- upon which Plaintiffs' 10(b) claims are predicated. lowing claims: (i) against AIG and the “Section (CCAC ¶ 552.) 10(b) Defendants” (defined below) for alleged viol- *2 The Section 10(b) Defendants and Frost are ations of Section 10(b) of the Securities Exchange named as the “Executive Defendants.” (CCAC ¶ Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b) 49.) Plaintiffs allege that all of the Executive De- (“Section 10(b)”), and Rule 10b-5 promulgated fendants exercised control over AIG and/or AIGFP thereunder, 17 C.F.R. § 240.10b-5 (“Rule 10b-5”); during the Class Period through the key manage- (ii) against the “Executive Defendants” (defined be- ment roles they played and their direct involvement low) for alleged violations of Section 20(a) of the in the Company's day-to-day operations, including Exchange Act, 15 U.S.C. § 78t-1 (“Section 20(a)”); its financial reporting and accounting functions. (iii) against AIG, the “Signing Executive Defend- (CCAC ¶ 566.) Sullivan, Bensinger and Herzog are ants” and the “Director Defendants” (defined be- named as the “Signing Executive Defendants.” low) for alleged violations of Section 11 of the Se- (CCAC ¶ 608.) Tse and the “Outside Director De- curities Act of 1933 (“Securities Act”), 15 U.S.C. § fendants” are named as the “Director Defendants.” 77k (“Section 11”); (iv) against the “Underwriter (CCAC ¶ 70.) Defendants” (defined below) for alleged violations of Section 11; (v) against PricewaterhouseCoopers The following twelve defendants or groups of de- © 2010 Thomson Reuters. No Claim to Orig. US Gov. Works. Page 3 Slip Copy, 2010 WL 3768146 (S.D.N.Y.) (Cite as: 2010 WL 3768146 (S.D.N.Y.)) fendants, comprising all of the served defendants, (CCAC ¶ 43); FN2 have moved to dismiss the claims asserted against them: (v) Andrew Forster, Executive Vice President of the Asset Trading & Credit Products Group of FN2. Plaintiffs have named two additional AIGFP during the Class Period, who was re- underwriters as defendants, Banca I.M.I. sponsible for managing AIGFP's global credit di- S.p.A. and Daiwa Securities SMBC Europe vision (which contracted to sell the CDSs at is- Ltd. Plaintiffs have not effected service of sue) and who gave investor presentations con- process on these defendants and they have cerning the Company's management of the CDS not appeared in this action. More than 120 portfolio (CCAC ¶¶ 44, 124, 346); days have passed since the filing of the Complaint. Accordingly, the claims asser- (vi) Alan Frost, Executive Vice President of ted against these two defendants are dis- AIGFP during the Class Period, who headed missed without prejudice pursuant to Fed- AIGFP's business and marketing efforts in the eral Rule of Civil Procedure 4(m). United States (CCAC ¶ 45); Fed.R.Civ.P. 4(m). (vii) David L. Herzog, Senior Vice President, (i) AIG, a holding company which, through its Comptroller, and Principal Accounting Officer of subsidiaries, engages in a wide range of insurance AIG throughout the Class Period, who signed the and financial service activities in the United Company's Forms 10-Q and 10-K throughout the States and abroad (CCAC ¶ 40); Class Period and participated in the Company's calls with research analysts throughout the Class (ii) Martin J. Sullivan, President and Chief Exec- Period (CCAC ¶¶ 46, 491); utive Officer of AIG from the beginning of the Class Period through his resignation on June 15, (viii) Robert Lewis, Senior Vice President and 2008, who signed the Company's Registration Chief Risk Officer throughout the Class Period, Statements and Forms 10-Q and 10-K throughout who signed off on each of the CDS contracts and the Class Period, and made many of the state- gave investor presentations concerning the Com- ments Plaintiffs allege to have been false or mis- pany's exposure to the mortgage market (CCAC leading (CCAC ¶¶ 41, 485); ¶¶ 47, 311, 329); (iii) Steven J. Bensinger, Executive Vice Presid- *3 (ix) 34 financial institutions that served as un- ent and Chief Financial Officer of AIG derwriters of AIG offerings of notes, debentures, and common stock during the Class Period (the throughout the Class Period, who signed the FN3 Company's Registration Statements and Forms “Underwriter Defendants”) (CCAC ¶ 51); 10-Q and 10-K throughout the Class Period, par- ticipated in the preparation of the allegedly false FN3.
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