American International Group Inc. in New York said Tuesday that it and a subsidiary, AIG Financial Products Corp., have settled claims by the Department of Justice and the U.S. Attorney for the Southern District of Indiana arising from certain structured transactions with Brightpoint Inc. and PNC Financial Services Group Inc.
As detailed in an AIG press release last Wednesday, an agreement with the Securities and Exchange Commission, under which AIG does not admit or deny any wrongdoing, will fully resolve all government claims against the company and its subsidiaries regarding the transactions and related public statements and press releases. The agreement calls for AIG to pay into an SEC disgorgement fund about $46 million in fees on the PNC transactions, which were structured by AIG Financial Products.
The AIG subsidiary is to pay a penalty of $80 million to the Justice Department.
The settlement with the department consists of an agreement with respect to AIG and its subsidiary and a complaint and deferred prosecution agreement with AIG Financial Products' subsidiary, PAGIC Equity Holding Corp., that forecloses future prosecutions in connection with the PNC and Brightpoint transactions, provided that the companies comply with the agreements. AIG Financial Products has also agreed to a statement of facts describing its conduct.
