Insurance giant AIG has settled a dispute with three Ohio public employee pensions for $115 million.
The Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and the Ohio Police and Fire Pension Fund all claimed AIG, its top executives and related firms used anti-competitive practices and fraudulent accounting that led to massive losses for the pensions.
AIG was a large player in credit-default swaps that many financial experts blamed for triggering the recession. Credit-default swaps are financial instruments designed to indemnify against losses on high-risk investments such as securitized subprime mortgages.
Last year, the federal government pumped $170 billion into AIG to back those insurance instruments.