This action arose out of allegations that AIG and certain of its officers and directors violated securities laws by failing to disclose AIG’s participation in bid-rigging and contingent commission schemes (alleged in a complaint by New York Attorney General Elliot Spitzer against Marsh & McLennan Companies). Following a period of substantial discovery and a motion for class certification, lead plaintiffs sought to amend their complaint for a fourth time to add new and unrelated claims as well as new defendants based on AIG’s alleged write-down in February and May 2008 of more than $20 billion stemming from losses in its portfolio of credit default swaps written by its subsidiary, AIG Financial Products Corp.
The District Court denied plaintiffs’ motion to amend, finding that: (1) the claims to be added took place more than three years after the transactions in the Third Amended Complaint; and (2) lead plaintiffs knew the basis for the promised amendment before they filed their motion for class certification and before they defended over a dozen class certification depositions. In short, the court found that granting the motion would result in undue prejudice for the defendants as well as a potentially uncertifiable class. In re American International Group, Inc. Securities Litigation, Case No. 04-8141 (USDC S.D.N.Y. July 17, 2008).
This post written by Lynn Hawkins.