The money will be distributed through a Fair Fund established by the Securities and Exchange Commission (SEC). Under the 2002 Sarbanes-Oxley Act, the regulator can use Fair Funds to distribute both illegally-obtained cash and civil settlements directly to the investors involved.
In a statement, the SEC said the AIG Fair Fund's court-appointed distributing agent estimates that checks will be sent to over 257,000 AIG shareholders over the coming months.
AIG was charged by the SEC with accounting fraud in February 2006. The regulator contested that between at least 2000 and 2005, the company materially falsified its financial statements and reported false and misleading information regarding its financial position.
The firm paid $800 million to settle the charges without admitting or denying any wrongdoing.
James Clarkson, acting director of the SEC's New York office, said: "The return of these funds to harmed investors is another example of our determined effort to protect investors from those who engage in corporate malfeasance."