New York authorities will not be bringing criminal charges against Maurice Greenberg, the former chairman of American International Group Inc., in connection with Greenberg’s efforts to increase AIG’s stock price, a state spokesman says.[@@]
New York Attorney General Eliot Spitzer in May filed a suit against AIG, New York, alleging that Greenberg and former AIG Chief Financial Officer Howard Smith used fraudulent business transactions and improper accounting practices to bolster AIG’s stock price.
At that time, Spitzer said AIG management had “routinely and persistently resorted to deception and fraud.”
News organizations speculated that Spitzer might be planning to bring criminal charges, but Spitzer spokesman Darren Dopp now says the issue of criminal charges had “just got confused” by the media.
Spitzer said in April that he thought the AIG matter would be resolved in civil court, Dopp says.
Attorneys working on the civil action against the company are making progress toward resolving it and “anticipate something happening before the end of the year,” Dopp says.
Both Greenberg and Smith have invoked their Fifth Amendment rights against self incrimination and have declined to answer questions from investigators.
In March, Greenberg resigned from his post as chairman of AIG. Smith was dismissed by the company around the same time.
Although New York officials do not plan to bring criminal charges in connection with Greenberg’s efforts to increase AIG’s stock price, the U.S. attorney’s office in Manhattan and officials in Washington at the U.S. Department of Justice are continuing to review AIG transactions, Dopp says.
In May, AIG restated its financial results for the past 5 years, cutting earnings by 10% and reducing the company’s book value by 3%. The company said then that certain transactions had been improperly booked.
Earlier this month, another adjustment improved AIG’s balance sheet, increasing retained earnings by $490 million.
Howard Opinsky, the spokesman for Greenberg’s legal team, has said in the past that Greenberg denies the allegations made by government officials and AIG’s current managers. Greenberg will vigorously defend himself against the allegations, Opinsky says.
An AIG spokesman says AIG has no comment.