Berkshire Hathaway’s P&C and life/health reinsurance arm General Re’s $72m settlement with AIG’s investors has won a final approval by a US federal judge, which charged the firm for involvement in a fraudulent transaction with AIG.
Gen Re was sued by a group of investors, accusing alleged involvement in deals during 2000 and 2001 that assisted in increasing AIG revenue and loss reserves.
As per the case, AIG and Gen Re violated federal securities laws through a $500m reinsurance transaction during 2000 that boosted AIG’s loss reserves and falsely increased its share price.
Approval of the settlement by the US District Judge Deborah Batts put an end on the continuous nine years of shareholder litigation, which was filed in 2004 by the AIG investors, headed by three Ohio public pension funds.
Batts was quoted by Reuters as saying that "the accord was a "long time coming" and would close out the AIG litigation.
While agreeing to settle the charges, Gen Re did not admit liability or wrongdoing.
Gen Re agreed to reimburse $92.2m in 2010, to settle US government charges that it helped AIG maneuver its financial statements.
Meanwhile, AIG has also paid $1.6bn fine to resolve various regulatory investigations of accounting fraud.