Former AIGFP Employees Allege Gender Age Bias

February 26, 2010

Two former American International Group Inc. female vice presidents have sued the insurer and its derivatives unit, saying they were fired after complaining about a “boys club” atmosphere and alleging gender and age bias against older women.

The women worked for AIG Financial Products, the unit where enormous, failed bets were made on credit default swaps, resulting in about $180 billion of federal bailouts that left taxpayers owning nearly 80 percent of New York-based AIG.

In a lawsuit filed Monday in the New Haven, Connecticut federal court, Susan Potter and Deonna Taylor alleged that AIG misled them about the existence of a salary cap, and paid male employees and younger employees more for comparable work.

The women also said the defendants “fostered a ‘boys club’ atmosphere,” and that 96 of AIG’s 108 vice presidents worldwide were men. They further alleged that Joseph Cassano, who once led AIG Financial Products, preferred to attract younger workers to give AIG “curb appeal,” and once remarked that he did not want any employees who looked like his aunt.

According to the complaint, Potter was 56 when she was fired in July 2009 after more than 21 years at AIG, while Taylor was 60 when she was fired in October 2008 after more than a decade there.

Potter is still 56 and Taylor is 62, the complaint said. Cassano is not a named defendant in the case.

“AIG denies it discriminated or retaliated against these plaintiffs,” spokesman Mark Herr said. “AIG prohibits discrimination on the basis of age, sex or any other protected category, and is committed to providing employees with a workplace free from unlawful discrimination and retaliation.”

Jim Walden, a Gibson, Dunn & Crutcher LLP partner who represents Cassano, said his client’s unit “had many capable women at all levels, including in senior management, who thrived under Joe’s supervision, including these plaintiffs.” He called the allegations that Cassano would tolerate and encourage chauvinism “shameful, but the truth will come out in court.”

The law firm provided copies of e-mails to Cassano, including one from Potter in 2002 thanking him for “another wonderful bonus” and from Taylor in 2008 thanking him for offering a “career opportunity” and extending praise in one year-end review for having “hit the ball out of the park.”

Deborah McKenna, a lawyer at Outten & Golden LLP representing the plaintiffs, said in a statement “we look forward to getting all of the facts through the discovery process, including e-mails from Mr. Cassano that he may have found not to his advantage to disclose.”

The complaint seeks back pay, compensatory and punitive damages, changes in AIG’s business and governance practices, and other remedies.

Federal prosecutors and the U.S. Securities and Exchange Commission are examining whether Cassano and others at AIG misled investors about losses from the credit default swaps.

The case is Potter et al v. AIG Financial Products Corp et al, U.S. District Court, District of Connecticut, No. 10-00250.

(Reporting by Jonathan Stempel; Additional reporting by Dan Margolies; Editing by Tim Dobbyn)

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