AIGs Greenberg Reportedly Probed On Stock Price
American International Groups CEO Maurice Greenberg is reportedly under investigation for allegedly manipulating his companys stock price during its acquisition of American General Corporation, Houston, 3 years ago.
According to a report in the Wall Street Journal, federal investigators are looking into reports Greenberg asked Richard Grasso, then head of the New York Stock Exchange, to help prop up AIGs stock price so it would not have to add stock to its bid for American General.
According to the Journal report, Greenberg was fearful that if his companys stock price fell too far, it would have to pony up more shares for the acquisition, which involved a stock swap worth around $23 billion.
The Journal article says Grassos office at that time contacted traders working for Spear, Leeds & Kellogg, to let them know of Greenbergs appeal. It was not known whether any of Spears traders bought AIG shares in response to that appeal, the Journal says. Spear, Leeds, a unit of Goldman Sachs Group, New York, declined to comment to National Underwriter about the report.
Joseph Norton, an AIG spokesman, says Greenberg has not been contacted by the U.S. Attorneys office.
Reproduced from National Underwriter Edition, November 24, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.