New York Attorney General Eric Schneiderman has elected not to appeal former American International Group Inc. CEO Maurice Greenberg's settlement in a federal lawsuit brought by AIG shareholders.

The state's move came as part of an effort to expedite civil fraud litigation brought by New York against Mr. Greenberg in a related case. In a letter sent Thursday to state Appellate Judge Andrew Klein, Mr. Schneiderman said his office would waive its right to appeal Mr. Greenberg's $115 million settlement of a class action securities lawsuit brought by the company's investors approved earlier this month in a U.S. District Court for the Southern District of New York.

Mr. Schneiderman said the state would also withdraw its claims for monetary damages, but would continue to pursue other forms of injunctive relief against Mr. Greenberg, including a lifetime ban from participating in the securities industry and from serving as an officer or director of a publicly traded company.

“Attorney General Schneiderman feels strongly that individuals in the financial services industry who perpetrate fraud, no matter how wealthy or powerful, must be held publicly accountable,” a spokesman for Mr. Scheiderman's office said in an email to Business Insurance. “That is why we believe justice will best be served by proceeding to a long overdue trial of Mr. Greenberg as quickly as possible.”

New York State sued Mr. Greenberg and AIG's former chief financial officer, Howard Smith, in 2005, alleging that the pair helped orchestrate bogus reinsurance transactions involving Capco Reinsurance Co. and General Re Corp. in order to pad AIG's financial results.

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In 2010, New York State Supreme Court Justice Charles Ramos held Messrs. Greenberg and Smith summarily liable for allegedly using the Barbados-based Capco Re as a shell corporation to absorb certain auto warranty losses, thus artificially boosting AIG's profit margins. However, Judge Ramos declined to grant a matching summary judgment on the state's allegations relative to AIG's transactions with Gen Re.

Last year, a five-judge panel of the state's Supreme Court's Appellate Division 1st Judicial Department overturned the lower court's summary judgment on the Capco allegations, but also refused to grant the defendants' motion for summary dismissal of the entire case.

The case is now before the New York Court of Appeals — the state's highest court — where the defendants have continued to argue that the state's allegations against them are pre-empted by federal securities law, and that the settlement of the federal lawsuit included injunctions that would make a decision in the state's favor redundant.