| NEW YORK, April 29
NEW YORK, April 29 Former AIG chief Maurice
"Hank" Greenberg will have to defend himself against claims of
accounting fraud in a non-jury trial conducted by a judge he
tried to remove for alleged bias.
Justice Charles Ramos of New York state court on Tuesday
ruled against Greenberg's demand for a jury to hear the civil
case brought by the New York attorney general.
Earlier this month, a New York appeals court rejected
Greenberg's attempt to remove Ramos from the long-running case.
Greenberg claimed Ramos was biased against him and could not
preside over a fair trial.
Ramos ruled from the bench in the latest legal wrangling in
the 2005 case that accuses Greenberg and the insurer's former
chief financial officer, Howard Smith, of orchestrating sham
transactions at the insurer to hide its financial condition.
A spokeswoman for Greenberg's lawyer, David Boies, declined
to comment on losing the bid for a jury.
Attorney Vincent Sama, who represents Smith, who also
sought a jury trial, said he may appeal the ruling.
Ramos also heard arguments by the executives' lawyers on
their motions to dismiss the case.
Boies said the lawsuit could not be pursued because
Schneiderman no longer had "a viable remedy."
New York Attorney General Eric Schneiderman, who inherited
the case, was forced to drop his claims for as much as $6
billion in damages last year after a class action settlement
between AIG shareholders and the executives and others over the
allegedly improper accounting.
The attorney general is now seeking "ill-gotten gains" from
Greenberg's compensation, according to attorney David Ellenhorn,
who represents Schneiderman.
He also wants to bar the executives from serving as
officers or directors of public companies and from participating
in the securities business.
Boies argued that Greenberg, 88, has no intention of
engaging in the securities business or in acting as a director
or officer of a public company.
Greenberg is the chairman and chief executive of the
privately held C.V. Starr & Co, which owns Starr Principal
Holdings, a registered security adviser. "He is controlling a
company that is in the securities business," Ellenhorn said.
Boies said Greenberg didn't participate in the management
of Starr Principal Holdings or its investment activity.
"That's nice, but it's not the whole picture," Ramos said.
"It sounds as if he's a control person...it opens the door to
Still, Ramos did not rule on whether the lawsuit, which was
originally brought by former New York attorney general Eliot
Spitzer, should proceed to trial.
Greenberg led AIG for nearly four decades before he
was ousted in 2005. The next year, AIG paid $1.64 billion to
settle federal and state probes into its business practices.
The case is People v Greenberg, et al, New York State
Supreme Court, New York County, No. 401720/2005.
(Reporting By Karen Freifeld; Editing by Ken Wills)