AIG: serial litigants’ suit ‘devoid of facts’
American International Group (AIG) has asked a California federal court to dismiss a lawsuit alleging that the insurer's taxpayer-funded 2008 bailout was "fraudulent" on the grounds that it has no basis in fact.
The New York-headquartered insurer said the amended complaint, re-filed in May by plaintiffs Derek and Nancy Casady, contained "odd detours", "rambling assertions" and was "devoid of particularised facts".
The litigants - former grocery store owners - claim they have obtained previously undisclosed information that allegedly shows AIG conspired with Wall Street banks to defraud the government by inflating the amount of emergency taxpayer support they required in the 2008 bailout.
In their third complaint, they argue that AIG should repay three times the amount it fraudulently obtained from the US administration, a sum that could amount to billions of dollars.
Societe Generale, Merrill Lynch, Bank of America, Deutsche Bank and Goldman Sachs are also named as defendants.
But AIG said on 9 August that the plaintiffs had failed to prove their case was not based on allegations already in the public domain.
The 300 paragraphs that the litigants added to the complaint were legally irrelevant and contained nothing new, AIG said.
AIG added that the complainants had "failed to allege in plausible and specific, non-conclusory terms the who, what, where, when and how of the alleged false claims, or even exactly what the alleged fraud is or what statement is alleged to be false".
The Casadys claim they have obtained non-public information from the mortgage industry, and conducted first-hand analysis that showed AIG had broken the False Claims Act.
Their complaint also alleges that AIG sold sham credit default swaps to major banks and then filed false claims to the US before its bailout.
AIG misrepresented its ability and intent to repay the New York Fed's loan, and mis-stated the value of securities bought by the central bank's bailout vehicles, according to the first complaint.
The Casadys first sued AIG on behalf of the US government in February 2010. In April this year, the Californian court asked the litigants to resubmit their case.