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Financial Planning > Trusts and Estates

Greenberg Takes The Fifth

By Daniel Hays

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Former American International Group CEO Maurice Greenberg invoked his right against self-incrimination and refused to answer questions from government officials last week about his companys accounting activity, his legal team confirmed.

Greenbergs appearance for a deposition at New York Attorney General Eliot Spitzers office, where he invoked the Fifth Amendment, was reported to take less than an hour.

Meanwhile, a Form 4 filing with the U.S. Securities and Exchange Commissionwhich is also investigating Greenbergrevealed that he had transferred $2.6 billion worth of AIG stock to his wife, Corinne, three days before his March 14 resignation as the insurance giants CEO.

Greenbergs lead attorney, David Boies, had announced the day before his client was scheduled to testify that he would not be answering questions, explaining that the attorney generals office had not given him enough time to prepare.

According to statements by Spitzer, investigators in part are looking into offshore entities created by AIG that they suspect were fraudulent. The probe is also looking at an AIG deal involving a finite reinsurance arrangement with General Re, a subsidiary of Berkshire Hathawayheaded by Warren Buffet, who testified on April 11, the day before Greenberg.

Spitzer, in a televised ABC interview on April 10, said evidence is “overwhelming these were transactions created for the purpose of deceiving the market. We call that fraud.”

Boies complained in a commentary in The Wall Street Journal on April 11 that his client risked “being set up” by open-ended questioning, and that the interrogation procedure did not allow objections from his attorneys and did not permit them to record his testimony or obtain a transcript.

According to a statement from Boies, “the great number of transactions under inquiry, the thousands of documents relevant to these transactions to which Mr. Greenberg has not yet been given access, and the fact that many of these transactions took place from five to 20 years ago have precluded Mr. Greenberg from adequately preparing for this testimony at this time.”

He said all requests by Greenberg to adjourn the April 12 subpoena date to give him reasonable time to prepare had been denied.

Greenbergs stock transfer to his wife involved a gift of 41.4 million shares, which have since declined in value. The filing explained that Greenberg is in charge of trusts for the benefit of children and grandchildren. It states that he “disclaims the beneficial ownership of, and any pecuniary interest in, the shares of AIG common stock held by these trusts and by his wife.”

is a senior editor of NUs Property & Casualty edition.

Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 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.

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