Friday, April 8, 2005
The SEC moved to ensure access to AIG documents, including those held by off-shore entities with substantial (if diminishing) ties to AIG, by obtaining a court order prohibiting the destruction of documents and an agreement from the off-shore companies to comply with the SEC's document requests. The SEC does not have jurisdiction over Starr International, a Bermuda company that controls approximately 12% of AIG's stock and has been a vehicle to compensate senior AIG executive (see earlier post here), and C.V. Starr & Co., a private Barbados reinsurer that did a substantial amount of business with AIG and whose board chairman was former AIG CEO Maurice Greenberg. The investigators concerns about the access and continued existence of documents rose substantial approximately two weeks ago when lawyers for Greenberg and Starr International (whose chairman is also Greenberg -- does anyone see a pattern here?) removed approximately 87 boxes of documents from offices in Bermuda owned by AIG but shared with Starr International. Not surprisingly, investigators are quite interested in those records, and lawyers are now in the process of organizing them for review by the various government agencies investigating AIG. A New York Times story here discusses the court order and agreement.
In a related story, the "reinsurance" agreement between General Re (a subsidiary of Berkshire Hathaway) and AIG that triggered the widening investigation of both companies includes documents that were altered by General Re employees after they were signed by the companies. Berkshire Hathaway apparently informed the government of the alterations, which triggered the investigation that has now engulfed AIG, Greenberg, and, to a much lesser degree, Berkshire Hathaway CEO Warren Buffet. Greenberg and Buffet are scheduled to speak with government investigators next week, although whether Greenberg testifies under oath remains to be seen. Another N.Y Times story here discusses the document alteration. (ph)