Ohio’s attorney general says a federal court ruling granting class-action status for three of the state’s pension funds against American International Group is “a substantial step closer to justice.”

The ruling, made Feb. 22 in the U.S. District Court for the Southern District of New York, allows shareholders to proceed as a group in a suit against AIG over securities purchased between 1999 and 2005 that alleges anti-competitive practices.

Richard Cordray

In a statement, Ohio Attorney General Richard Cordray said the ruling “builds the pressure on AIG” as the insurer had previously “refused to accept responsibility and engage in meaningful settlement discussions.”

Cordray added, “If they continue their resistance, we are now cleared to take them to trial.”

The attorney general is litigating the case on behalf of a group known as the Ohio Funds, comprised of the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio and Ohio Police and Fire Pension Fund. The groups were named lead plaintiffs by the court in 2005 in a suit against AIG and its executives over the alleged use of undisclosed contingent commissions and bid-rigging. The case also alleges accounting fraud resulting in a $3.9 billion restatement of the insurer’s publicly available financial and regulatory filings.

“The investors and retirees who were harmed by AIG have been waiting for years to be made whole,” Cordray said. “AIG has taken billions of dollars in bailout money from taxpayers and, at the same time, is seeking to pay hundreds of millions of dollars in bonus compensation that even federal regulators have called ‘outrageous.’ Today we are a substantial step closer to justice for Ohio’s pension systems and their members.”

Last year, Maurice “Hank” Greenberg, AIG’s former chairman and chief executive officer, and three other former executives reached a $115 million settlement on the fraud claims in the suit.