Former General Re CEO Gets Notice of Possible SEC Securities Fraud Suit

Former General Re CEO Ronald Ferguson joined a slew of other executives at the firm, both current and former, who have received Wells Notices from the SEC that the Enforcement Division staff intends to recommend that the Commission file a securities fraud suit (earlier post here).  The notices are related to the American International Group-General Re "finite insurance" transaction that resulted in AIG improperly accounting for its insurance reserves.  Ferguson left General Re in 2001, and Berkshire Hathaway, which owns General Re, terminated his consulting contract in May when he refused to cooperate in the investigation by the SEC and U.S. Attorney for the Southern District of New York by stating that he would take the Fifth Amendment in response to questions.  A Berkshire Hathaway press release (here) states that Ferguson has received his Wells Notice, and the question now is whether the federal prosecutors will seek criminal charges in addition to any civil enforcement action.  (ph)