COLUMBUS, Ohio – American International Group Inc. and some of its directors and officers have agreed to a $725 million settlement to resolve allegations of wide-ranging fraud laid out in a class action suit led by three Ohio pension funds.

Ohio Attorney General Richard Cordray said Friday the latest figure will combine with previous AIG settlements reached with secondary defendants to pay about $1 billion to shareholders, including pensions representing firefighters, police, teachers, librarians and others.

He characterized it as the 10th largest securities litigation settlement in U.S. history.

The lawsuit alleged anti-competitive market division, accounting violations, and stock price manipulation by AIG between October 1999 and April 2005.

According to Cordray, “The serious misconduct by AIG more than deserves today’s large settlement.”

Cordray’s office represented the Ohio Public Employees Retirement System, State Teachers Retirement System of Ohio, and the Ohio Police and Fire Pension Fund, who were lead plaintiffs.

The settlement still requires court approval, after which an initial payment will be made of $175 million, Cordray said.

AIG will fund the remaining $550 million through one or more offerings of common stock.

If the necessary amount can’t be raised, plaintiffs will have three options: terminate the agreement, acquire shares of AIG stock worth $550 million, or grant an extension, he said.