Thursday, July 19, 2012
The New York Court of Appeals will hear an appeal by former AIG executives Hank Greenberg and Howard Smith asserting that the state attorney general's action against them for violating the state's Martin Act is preempted by federal legislation --PSLRA, NSMIA and SLUSA -- that establishes a uniform federal standard for securities litigation. In State of New York v. Greenberg, the state charged the executives with violating the statute because of their role in fraudulent transactions designed to portray an unduly positive picture of AIG's loss reserves and underwriting performance. The trial court denied defendants' motion for summary judgment, and the Appellate Division affirmed, 95 A.3d 474 (Ist Dept. 2012(one justice dissenting). David Boies is representing Greenberg.