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Is Spitzer Easing Greenberg Charges?

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A lawyer for Maurice Greenberg, former chairman of American International Group Inc., says New York Attorney General Eliot Spitzer has agreed to narrow the scope of a civil fraud case against his client.

David Boies, Greenberg’s lawyer, says in a statement that Spitzer has agreed to drop “key claims” from the complaint, but Boies does not say which claims he believes Spitzer is dropping.

“We are confident that when all the facts are out, the remaining claims, which relate to accounting disputes involving much smaller amounts than the claims that are being dropped, will also be dismissed,” Boies says in the statement.

Boies says the remaining accounting disputes involve “accounting decisions that were undisputedly reviewed with, and approved by, AIG’s current management.”

Boies was not immediately available to answer questions about the statement.

Brad Maione, a Spitzer spokesman, says in comments made through electronic mail that the attorney general’s office has merely dropped AIG, New York, as a party to a $1.64 billion settlement negotiated in February.

That settlement did not include Greenberg, Maione says.

The amended complaint “is an effort to streamline discovery, allowing us to focus our efforts on the securities fraud claims at the heart of the case,” Maione says. “The remaining claims involve direct efforts by Greenberg and Smith to mislead the investing public about the true state of AIG’s financial condition.”

A state court judge in New York has jurisdiction over the case.

Representatives for Greenberg have welcomed Boies’ announcement about the possibility that Spitzer might drop some claims.

“As we have said, Greenberg’s actions as chairman and [chief executive officer] of AIG were legal, based on sound business judgment and in the best interests of AIG shareholders,” Greenberg spokesman Howard Opinsky says. “Shareholders are owed an explanation as to why $1.6 billion in company funds were spent to settle allegations that do not withstand scrutiny.”

Vincent Sama and Andrew Lawler, attorneys for Howard Smith, the former chief financial officer of AIG, New York, another defendant in the civil action, also are welcoming the Boies announcement.

“We are pleased by this development and are confident that, after all the facts are considered, the remaining claims will be dismissed,” Sama and Lawler say.


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