Wednesday, March 30, 2005

Another Shoe Drops on AIG

Things may get much worse for American International Group Inc. with the revelation by its lawyers that false information was provided to state insurance regulators concerning at least one reinsurance contract.  A Wall Street Journal article (here) states that AIG's lawyers disclosed that intentionally false statements were made during an examination of the company this year, and that past regulatory and securities filings were misleading.  Unfortunately for AIG, a lied is rarely told only once, and misleading disclosures are usually the result of accumulated transactions that move from aggressive to questionable to fraudulent.  The New York State Insurance Department had adopted a CEO certification requirement, similar to the one imposed by the Sarbanes-Oxley Act on CEOs and CFOs for financial statements, in response to AIG's conduct (see New York Times story here). (ph)

Investigations, Securities | Permalink

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