Saturday, November 26, 2005

Greenberg Dodges a Criminal Bullet

Former American International Group, Inc. CEO Maurice Greenberg will not be facing criminal charges from the New York Attorney General's Office, which decided in June not to pursue a criminal case arising from the accounting problems at AIG.  While N.Y. Attorney General Eliot Spitzer has a civil fraud case pending against Greenberg and former CFO Howard Smith filed in May (complaint here), there was some talk by Spitzer that the office could pursue criminal charges against individuals at the company.  Continuing a pattern seen over the last few weeks (earlier post here), Spitzer's office decided not to pursue a criminal case based on questionable facts and, as with all accounting cases, significant gray areas.  The fact that Greenberg has very deep pockets and indicated he would fight any charges would have made a criminal case that much more difficult. 

Greenberg is not off the hook completely on potential criminal actions because the Southern District of New York and the Fraud Section at Main Justice are also looking at potential criminal charges, which could include securities and mail/wire fraud related to any accounting problems that led to serious misstatements.  Things have been quiet on the AIG front for a while, and the holiday season is usually slow but may produce further developments.  An AP story (here) discusses Spitzer's decision.

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