Court decides Bernanke should testify in A.I.G. securities class action
The unusual aspects of the A.I.G litigation being brought against the U.S. by the company’s former chief executive keep on getting a little more unusual. Just the other day, a federal judge ruled that none other than Federal Reserve Chairman Ben Bernanke would need to appear as a witness in the case. Testimony from the Fed chairman would “unquestionably” be relevant to the case, Judge Thomas C. Wheeler of the United States Court of Federal Claims said, according to a New York Times article.
That’s not the only thing that makes this case unusual. The recent AIG case is a unique situation because it’s considered “opt-in”. This is different because most securities class actions are opt-out, for which an investor is included in the class and must submit a claim once a settlement is reached to receive a recovery. In the A.I.G. litigation, investors must proactively opt in to be included in any potential settlement.
A.I.G.’s former chief executive Maurice R. Greenberg is pursuing the lawsuit on behalf of investors through his investment vehicle Starr International. The lawsuit argues that shareholders of A.I.G. lost tens of billions of dollars when the government attached burdensome terms to the $182 billion bailout in 2008.
Click here for an example of a notice that went out to FRT clients containing more information about the case.