Ohio Attorney General Richard Cordray confirmed late Thursday that Maurice R. "Hank" Greenberg, American International Group Inc.'s (AIG) former chief executive, and a group of former AIG executives have agreed to pay $115 million to settle a shareholder lawsuit over alleged false statements regarding the insurer's financial results.

In a statement Thursday, Cordray said Greenberg; Howard Smith, AIG's former chief financial officer; and others had reached an agreement in principal to settle a consolidated shareholder action brought by a group of Ohio pension funds in U.S. District Court in Manhattan.

"AIG cannot be permitted to defraud investors and other companies who play by the rules," Cordray said in a statement. "This agreement in principle will help compensate investors - including Ohio pension funds - who were harmed by AIG's misconduct."

The agreement is contingent, in part, on approval of the case as a class action and approval of the deal by the boards of the Ohio funds.

U.S. District Judge Deborah A. Batts in Manhattan is expected to continue a two-day hearing Friday on whether to grant class-action status, which is contested.

The lead plaintiffs are the Ohio Public Employees Retirement System, the State Teachers Retirement System of Ohio and the Ohio Police & Fire Pension Fund.

A lawyer for Greenberg declined comment late Thursday. A lawyer for Smith didn't immediately respond to a request for comment late Thursday.

In February, General Re Corp., a unit of Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB), agreed to pay $72 million to settle claims against it in the case. PricewaterhouseCoopers LLP previously agreed to a $97.5 million settlement in the case.

AIG remains a defendant in the case. An AIG spokesman declined comment late Thursday.

The agreement follows a settlement by Greenberg and Smith last week with the U.S. Securities and Exchange Commission, in which neither man admitted or denied wrongdoing. Greenberg agreed to pay $15 million in the SEC action, while Smith agreed to pay $1.5 million.

Greenberg resigned as AIG's top executive in March 2005 amid probes into the insurer's accounting.

In 2005, AIG said it would restate more than four years of its earnings. It also said at the time, without naming Greenberg directly, that former executives at times were able to "circumvent internal controls over financial reporting."

In 2006, AIG agreed to pay more than $1.6 billion to settle accounting fraud allegations by the New York attorney general's office and the SEC.

New York Attorney General Andrew Cuomo is still pursuing a case against Greenberg and Smith.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com