All material subject to strictly enforced copyright laws. © 2021 Insurance Insider is part of Euromoney Institutional Investor PLC.
Accessibility | Terms & Conditions | Privacy Policy | Modern Slavery Act | Cookies | Subscription Terms & Conditions

Greenberg trial slated for January 2015

After nine years of legal wrangling, former American International Group (AIG) CEO Maurice "Hank" Greenberg will face a New York court in January 2015 over the infamous $500mn finite reinsurance transactions between the insurer and Berkshire Hathaway's General Re.

In 2005, former New York Attorney General Eliot Spitzer sued Greenberg and the erstwhile AIG finance director Howard Smith, claiming the transactions were used to help AIG artificially hide losses.

The pair were also accused of improper use of Barbados-based Capco as a shell corporation to remove over $200mn of auto warranty losses from the insurance giant's books.

Spitzer - who is now attempting to rebuild his reputation after his downfall in the Mayflower Hotel, Washington - claimed the transactions made AIG look healthier than it was.

But in the intervening years, much of the venom in Spitzer's charges has been removed. For example, in April 2013 the current New York Attorney General, Eric Schneiderman, renounced plans to seek damages of $6.6bn.

In 2006, AIG paid $1.6bn to settle accounting fraud allegations with the Securities and Exchange Commission and the New York Attorney General's office.

The company was forced to restate several years of accounts, leading to numerous lawsuits against the insurer and executives from the time.

Greenberg himself, through his Starr International insurance vehicle, is currently pursuing the US government for $55.5bn in damages, as he argues that its bailout of AIG was more punitive than others of 2008.

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree