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Greenberg sues Spitzer for defamation

On the same day that former New York attorney general Eliot Spitzer tried to stage a political comeback, his old adversary Maurice "Hank" Greenberg sued the politician for a "long-standing malicious campaign" to discredit and defame him.

In an extraordinary intervention, Greenberg filed the suit at the New York court of appeals on 12 July, just as the former New York governor secured a place on the ballot to become the city's comptroller an hour before the midnight deadline.

Pundits have long anticipated that Spitzer would attempt to return to power after he resigned as governor in 2008 following a prostitution scandal, and last Friday night he entered the New York Board of Elections office with four boxes of 27,000 signatures for the ballot.

But Greenberg, who stepped down as CEO of American International Group (AIG) in 2005 after Spitzer accused him of accountancy fraud, made a last-minute bid to frustrate the campaign.

The former CEO, who is on trial for the same charges made eight years ago, listed a series of "defamatory" statements made by Spitzer between 2004 and 2012.

According to the lawsuit, Spitzer had alleged in an interview in 2012 that Greenberg had run AIG in a "crooked" and "corrupt" way.

Greenberg made reference to his philanthropic acts and Spitzer's "numerous acts of moral turpitude", and said the Democrat only sought to damage Greenberg's reputation and bolster his own career.

Spitzer, who was dubbed the sheriff of Wall Street for his crusade against financial wrongdoing during his tenure as attorney general between 1999 and 2006, called the suit "frivolous" and denied that it would dent his campaign.

He said that Greenberg's claims had been dealt with in June when the New York court of appeals refused to dismiss a suit alleging that he covered up sham reinsurance deals that boosted AIG's profits and deceived investors.

Greenberg and former AIG CFO Howard Smith settled with the Securities and Exchange Commission in 2009 for a total of $16.5mn without admitting to any allegations against them. AIG, by contrast, paid $1.6bn to settle fraud allegations in 2006.

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