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AIG Must Face Claims in Employee Pension Suit, Judge Says

American International Group Inc., the insurer bailed out by the U.S. government, must face some claims by current and former employees that it invested their retirement funds too heavily in company stock.

U.S. District Judge Laura Taylor Swain in Manhattan said yesterday that AIG and some directors, including former board member and Chief Executive Officer Martin Sullivan, must defend allegations of breach of fiduciary duty in a lawsuit filed in 2008. She dismissed claims by participants in a Puerto Rican unit’s retirement plan.