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AIG, Allianz unit argue over credit default swaps exposure

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American International Group Inc. is promising to “vigorously” defend itself against charges by Pacific Investment Management Co. that it had misled investors about its exposure to risky investments that led to the insurer’s near-collapse in 2008.

In a complaint filed in California Superior Court in Santa Ana last week, Pimco, part of Munich-based insurer Allianz S.E., charged that AIG had violated the Securities Act of 1933 by failing to warn investors about the problems created by its investment in credit default swaps, and had misstated the value of its CDS portfolio.

The complaint seeks an unspecified amount of damages.

AIG recently settled with a group of investors alleging they had been misled about the CDS exposure of $970.5 million. Pimco was not part of that settlement.

“We regret that rather than participate in the fair and reasonable settlement negotiated in the class action proceeding involving substantially the same issues, these plaintiffs have filed an individual copycat action in an effort to obtain a windfall recovery,” AIG said in an email. “We will defend the case vigorously.”