Saturday, July 16, 2005
Greenberg Challenges AIG's Restatement
Former American International Group CEO Maurice Greenberg told a group of current and former company executives that the accounting for at least one of the transactions that was the subject of a recent restatement was done properly, based on advice from the company's lawyers and auditors. Greenberg spoke at a meeting of the shareholders of C.V. Starr & Co., the Bermuda company used as a vehicle to compensate AIG senior executives that controls (as of March 31) approximately 12% of AIG's shares. As part of its restatement, the company said it needed to account for payments to AIG executives from C.V. Starr differently, a position that Greenberg disputes. A Reuters story (here) also notes that Greenberg said at the meeting that he had put together "white papers" on the accounting for other transactions under scrutiny by the various state and federal agencies investigating AIG (and others), and will meet with regulators to provide them with his side of the accounting story.
Greenberg, no doubt working with his lawyers, appears to be taking the offensive to try to head off any criminal or SEC civil claims against him. New York Attorney General Eliot Spitzer's office (along with the Superintendent of Insurance Howard Mills's office) has already filed a civil suit (here) against Greenberg and former AIG CFO Howard Smith, but that is a comparatively mild threat compared to a criminal case brought by the Department of Justice, and probably less threatening than an SEC securities fraud case. (ph)