AIG launched a pre-emptive strike Wednesday, putting out a four-page dossier attacking Greenberg's credibility. The 83-year-old Greenberg was forced out in 2005 amid a scandal over securities fraud. The once-mighty insurance giant's departure into exotic credit derivatives began under Greenberg in the mid 1980s [3] -- and culminated last fall when the AIG's bad bets came due and forced a taxpayer bailout.
"Given that Hank Greenberg led AIG into the credit default swap business, has repeatedly refused to testify under oath about a transaction he initiated when he was still AIG's CEO, and is being investigated by the SEC and the Justice Department, we don't understand how he can be viewed as having any credibility on any AIG issue," the company said in its statement.
Read on.
More from Propublica:
Greenberg's attacks on company management provoked a counterattack from AIG, which last night sent reporters a three-page "fact sheet" detailing allegations, a history of legal disputes and other instances of what the company sees as Greenberg's mischaracterizations of his management of AIG.
And there is more:
Read on.
More from Propublica:
Greenberg's attacks on company management provoked a counterattack from AIG, which last night sent reporters a three-page "fact sheet" detailing allegations, a history of legal disputes and other instances of what the company sees as Greenberg's mischaracterizations of his management of AIG.
And there is more:
Here is a breakdown of the AIG rap sheet, present and past:
Current Investigations:
-The FBI, SEC, and the British Serious Fraud Office are investigating the AIG Financial Products Group for hiding its losses on investments related to derivatives known as credit default swaps. The group was headed by Joseph Cassano, the Brooklyn-born son of a cop, until he stepped down in February. It sustained a loss of more than $11 billion in the fourth quarter of 2008.
Cassano, who started out working for junk bond king and one-time prison inmate Michael Milken, said of the group in August 2007: "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these transactions."
Cassano, who started out working for junk bond king and one-time prison inmate Michael Milken, said of the group in August 2007: "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these transactions."
This wasn't Cassano's first legal controversy. The Justice Department charged his unit in 2004 with helping another firm, PNC Financial Services, to conceal certain assets from its books. AIG settled the case and paid a hefty $80 million in fines.
-In a separate investigation, New York Attorney General Andrew Cuomo is pursuing a civil case launched by his predecessor Eliot Spitzer into Maurice "Hank" Greenberg, the former head of AIG who stepped down amid controversy in 2005. The investigation stems from a deal struck in 2000 between AIG and fellow insurer General Re. The case has already resulted in four guilty sentences and a large settlement (See below).
January 2009:
-A senior executive of AIG was found guilty in the 2000 case involving AIG and General Re. Christian Milton, who was AIG's vice president of reinsurance from 1982 to 2005, was convicted of conspiracy, securities fraud, mail fraud, and making false statements to the SEC in the case, which cost shareholders nearly $600 million.
Greenberg was not charged in the case, although prosecutors identified him as an "unindicted co-conspirator."
-A senior executive of AIG was found guilty in the 2000 case involving AIG and General Re. Christian Milton, who was AIG's vice president of reinsurance from 1982 to 2005, was convicted of conspiracy, securities fraud, mail fraud, and making false statements to the SEC in the case, which cost shareholders nearly $600 million.
Greenberg was not charged in the case, although prosecutors identified him as an "unindicted co-conspirator."
September 2008:
-Greenberg and three other former AIG executives paid $115 million to settle a case brought by a Louisiana pension fund.
The Teachers' Retirement System of Louisiana alleged that half of the $2.2 billion that AIG paid to C.V. Starr -- a firm run by Greenberg that also underwrote some AIG business -- from 2000 to 2005 was a sham, a way to artificially drive profits to the company. They also questioned why some AIG executives were allowed to serve simultaneously as officers of Starr, while also profiting from business between the two companies.
-Greenberg and three other former AIG executives paid $115 million to settle a case brought by a Louisiana pension fund.
The Teachers' Retirement System of Louisiana alleged that half of the $2.2 billion that AIG paid to C.V. Starr -- a firm run by Greenberg that also underwrote some AIG business -- from 2000 to 2005 was a sham, a way to artificially drive profits to the company. They also questioned why some AIG executives were allowed to serve simultaneously as officers of Starr, while also profiting from business between the two companies.
February 2006:
-AIG agreed to pay more than $1.6 billion -- the biggest regulatory settlement by a single company in U.S. history, according to Reuters -- to settle claims related to the 2000 case involving General Re and AIG. The settlement was for improper accounting, bid rigging and practices involving workers' compensation funds. Then-New York Attorney General Eliot Spitzer said at the time that AIG "finds itself in this position solely because some senior managers thought it was acceptable to deceive the investing public and regulators."
-AIG agreed to pay more than $1.6 billion -- the biggest regulatory settlement by a single company in U.S. history, according to Reuters -- to settle claims related to the 2000 case involving General Re and AIG. The settlement was for improper accounting, bid rigging and practices involving workers' compensation funds. Then-New York Attorney General Eliot Spitzer said at the time that AIG "finds itself in this position solely because some senior managers thought it was acceptable to deceive the investing public and regulators."
September 2003:
-AIG paid a $10 million civil penalty to settle fraud charges involving Plainfield, Ind.-based phone distributor Brightpoint Inc.
The SEC charged AIG with fashioning and selling "purported insurance product that Brightpoint used to report false and misleading financial information to the public."
There are also numerous lawsuits Greenberg and his former company have lobbed at one another. Some recent examples:
-Earlier this month Greenberg sued AIG and some senior executives, alleging securities fraud that cost him $2 billion. Greenberg claims the company and its executives were untruthful about its dire financial state.
"I was hurt very badly" as a result of the decline in the stock price, Mr. Greenberg told CNBC.
AIG fired back with its own suit, claiming that Greenberg was "directly responsible" for the creation of the AIG Financial Products Group that originated the credit default swaps that brought the insurer to its knees.
-AIG paid a $10 million civil penalty to settle fraud charges involving Plainfield, Ind.-based phone distributor Brightpoint Inc.
The SEC charged AIG with fashioning and selling "purported insurance product that Brightpoint used to report false and misleading financial information to the public."
There are also numerous lawsuits Greenberg and his former company have lobbed at one another. Some recent examples:
-Earlier this month Greenberg sued AIG and some senior executives, alleging securities fraud that cost him $2 billion. Greenberg claims the company and its executives were untruthful about its dire financial state.
"I was hurt very badly" as a result of the decline in the stock price, Mr. Greenberg told CNBC.
AIG fired back with its own suit, claiming that Greenberg was "directly responsible" for the creation of the AIG Financial Products Group that originated the credit default swaps that brought the insurer to its knees.
In May 2008, Greenberg's Starr Foundation sued AIG, claiming it had "misrepresented and concealed the truth" about losses related to its credit default swaps. Greenberg maintains that if Starr, whose holdings of AIG shares is its only currency, knew of AIG's potential losses, it would have sold the shares.
No comments:
Post a Comment