PwC pays $97 million to Ohio pension funds in AIG case

Big Four firm PricewaterhouseCoopers has agreed to pay three Ohio pension funds $97.5 million to settle its part of a securities class action filed against American International Group (AIG).

The settlement stems from a suit filed against AIG in 2004 by three Columbus-based pension funds: the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio, and the Ohio Police & Fire Pension Fund. The pension funds wanted damages for shares bought between October 1999 and April 2005. AIG was forced to restate earnings by almost $4 billion in 2005 after an investigation by the SEC and former New York State Attorney General Eliot Spitzer, which led to ouster of CEO Maurice "Hank" Greenberg.

The pension funds contend that PwC violated securities laws in its audits of AIG's financial statements during those years.

"We have decided to settle the case at this stage to avoid the enormous litigation costs that would be incurred if the case continued against the firm, while at the same time eliminating any potential exposure," said a PwC spokeswoman in a statement to The Am Law Daily.

The payout is one of the 10 highest to be paid by an accounting firm to settle a securities fraud class action, Chris Geidner, Ohio's principal assistant attorney general, told the Guardian. "Auditors are not 'non-speaking actors' and they have to issue opinion letters which are part of a company's SEC filings," he said.

The PwC settlement must be approved by U.S. District Court Judge John Sprizzo in Manhattan. PwC continues to serve as AIG's independent auditor.

The case is not related to AIG's $122.8 billion bailout by the federal government.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.