AIG wins first round in lawsuit filed by financial planner

A judge in Los Angeles Superior Court pushed back a lawsuit against AIG from a financial planner who once worked for an AIG broker-dealer. Linda M. Harris, president of Independent Financial Group Inc., sued American International Group Inc., along with a large number of subsidiaries and executives, as well as accounting firm PricewaterhouseCoopers LLP. She asserted that the insurance company committed unlawful business practices. Ms. Harris argued that her clients had as much as $15 million in AIG insurance products and that the losses from AIG's financial-products unit lowered the company's capital, resulting in higher prices for customers. Ms. Harris also said she was concerned about AIG's ability to pay future claims, according to the complaint. Judge Yvette M. Palazuelos ruled against Ms. Harris, however, giving her 30 days to amend and resubmit her complaint. In the ruling, Ms. Palazuelos noted that "in this case, the relief sought by plaintiffs necessarily requires this court to make a determination about the propriety of various AIG business practices, such as its investment decisions. An extensive regulatory framework in California already exists to address policyholders' problems caused by a carrier's business decisions and investments, and to fashion suitable remedies." Mark Herr, an AIG spokesman, said that the the company "was pleased that the court recognized that the plaintiffs had not pled sufficient facts on which to base their allegations." Calls to Ms. Harris' attorney, Michael J. Aguirre of Aguirre Morris & Severson LLP, were not immediately returned. Ms. Harris declined to comment on the outcome of the case, saying that she is waiting to hear from her attorney. Ms. Harris, now a registered representative with National Planning Corp., used to be affiliated with Royal Alliance Associates Inc., an AIG broker-dealer, according to the Financial Industry Regulatory Authority Inc.'s BrokerCheck records.