| NEW YORK, April 25
NEW YORK, April 25 New York's attorney general
is dropping a claim for damages in a high-profile civil lawsuit
accusing the former chief executive of American International
Group Inc, Maurice "Hank" Greenberg, of defrauding
investors, according to a letter sent by the attorney general's
office on Thursday.
The 2005 lawsuit filed by then-Attorney General Eliot
Spitzer against Greenberg and former AIG chief financial officer
Howard Smith sought as much as $6 billion in damages.
In an April 25 letter to the New York Court of Appeals, New
York Solicitor General Barbara Underwood wrote that the state
would still be pursuing the civil fraud case against the
defendants but would not be seeking damages, in order "to avoid
further delay and expedite the trial of the state action."
The office will continue to pursue other remedies against
the defendants, including a potential ban on working in the
securities industry or serving as an officer or director of a
public company, the letter said.
"Attorney General (Eric) Schneiderman feels strongly that
individuals in the financial services industry who perpetrate
fraud, no matter how wealthy or powerful, must be held publicly
accountable, and that is why we believe justice will best be
served by proceeding to a long overdue trial of Mr. Greenberg as
quickly as possible," New York attorney general spokesman Damien
LaVera said in a statement.
A lawyer for Greenberg, David Boies of Boies Schiller &
Flexner, said in a statement that the action "finally brings
down the curtain on a series of issues of claims that were never
justified and should never have been brought in the first
The decision to withdraw the claim for damages in state
courts follows an April 10 order approving a $115 million
settlement reached by AIG shareholders with Greenberg and other
defendants over alleged accounting improprieties at the
Lawyers for Greenberg argued that the $115 million
settlement in federal court would effectively preclude
Schneiderman from seeking "duplicative damages" from Greenberg
in state court.
The attorney general's lawsuit centered around two
reinsurance transactions in 1999 and 2000. It was brought under
the Martin Act, a law that allows New York's top state
prosecutor to pursue criminal or civil fraud cases involving
suspected corporate wrongdoing.
The case is currently pending before the New York Court of
Appeals, the state's highest court.
The case is People v. Greenberg et al, Supreme Court of the
State of New York, New York County, No. 401720/05.