Please ensure Javascript is enabled for purposes of website accessibility

GE’s pension trust suing AIG over subprime portfolio

General Electric Co.’s pension trust is suing American International Group Inc. over losses related to the insurer’s 2008 government bailout. AIG failed to disclose to investors the risk in its portfolio as the company increased its exposure to the subprime mortgage market in 2005 through credit-default swap contracts, the plaintiffs, including GE’s pension trust and other funds, said in a lawsuit filed Monday in New York federal court. AIG’s subsequent losses during the housing market collapse and the company’s costly rescue led to a plummeting share price and “substantial damage” to the GE funds, according to the complaint. GE said it dropped out of an earlier class action lawsuit against the insurance company. AIG said in August that it agreed to pay $960 million to settle claims with shareholders who said they were misled by AIG prior to its bailout.