Compliance January 5, 2011

AIG Participant Sues PwC over Audits

A former employee of American International Group Inc. filed a lawsuit claiming PricewaterhouseCoopers L.L.P. was negligent in its audits of AIG and failed to pursue a claim against the accountants.
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Reuters reports that Wanda Mimms brought the suit on behalf of the AIG Incentive Savings Plan against PwC and AIG’s board. Mimms contends the AIG incentive plan held shares in the company from late February 2008 through late January 2009, and PwC, as AIG’s auditor, should have known the share price was inflated by inaccurate financial statements.  

According to Reuters, the complaint says Mimms demanded in July 2010 that AIG’s investment committee pursue action against PwC for losses in the plan; her demand was referred to AIG’s board, which rejected it in September.  

The lawsuit asks that PwC be ordered to make the incentive plan whole for its losses, as well as other relief.  

A PwC spokesman told Reuters the company has not been served and cannot comment at this time. An AIG spokesman declined to comment.  

The case is Mimms v. PricewaterhouseCoopers L.L.P. et al, U.S. District Court, Southern District of New York, No 11-00030.

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