AMERICA’s two biggest public pension funds were last night poised to launch a $400 million (£212 million) lawsuit against AIG, in an effort to reclaim money that they have lost since an accounting scandal wiped billions off the insurer’s market value.

Phil Angelides, the California State Treasurer, said CalPERS and CalSTRS had seen the value of their AIG stakes plunge from about $1.5 billion to $1.1 billion in the two months since the investigations into the insurer’s accounts first surfaced.

A spokesman said that Mr Angelides had authorised the pension funds to pursue any means to claw back the money they have lost. “That includes the possibility for lawsuits,” the spokesman said, adding that AIG, its top executives and PricewaterhouseCoopers, its auditor, could be named as defendants. The California Treasurer also urged other pension funds to consider action.

Mr Angelides said yesterday: “AIG is a poster child of the corporate corruption that has brought the fairness and integrity of our nation’s financial markets into question, if these allegations prove to be true.” He said losses suffered by CalPERS and CalSTRS over AIG were “approaching WorldCom and Enron magnitudes”. CalPERS and CalSTRS combined have more than $300 billion of assets under management. Mr Angelides has a record of using the funds ’ financial clout to force corporate governance reform.

Maurice “Hank” Greenberg, the ousted former chief executive and chairman of AIG, yesterday refused to answer questions related to the alleged accounting irregularities posed by investigators from the Securities and Exchange Commission and the office of Eliot Spitzer, the New York attorney-general.

AIG declined to comment last night.

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