Ex-AIG chief Greenberg may face SEC charges
NEW YORK (Reuters) - Maurice "Hank" Greenberg, former chief executive of American International Group Inc (AIG.N), may face civil charges for his alleged role to improperly boost the insurer's financials, a spokesman for Greenberg said on Wednesday.
Greenberg received a "Wells notice" from the U.S. Securities and Exchange Commission on Friday, indicating possible charges over his role in reinsurance transactions between AIG and Berkshire Hathaway's (BRKa.N) (BRKb.N) General Re Corp unit.
A Wells notice indicates that the SEC is considering civil charges, and gives the recipient a chance to mount a defense.
"We remain confident of our position on the merits, and we believe that none of the remaining issues are material to AIG's financial statements," Robert Morvillo, Greenberg's lawyer, said in an e-mailed statement.
An SEC spokesman also did not immediately return a call seeking comment.
On Friday, U.S. District Judge Christopher Droney, who oversaw a trial that led to convictions of former AIG and General Re executives accused of helping AIG inflate reserves, said there was sufficient evidence to show a conspiracy started with a phone call from Greenberg.
The fraud accusations stem from a 2000 transaction in which AIG and General Re executives attempted to boost AIG's loss reserves to make the world's largest insurer look better to investors.
A former AIG executive and four former General Re executives, including Chief Executive Ronald Ferguson, were accused of conspiring to inflate AIG'S loss reserves by $500 million through fraudulent reinsurance transactions.
Greenberg was ousted as AIG's chairman and chief executive in 2005 amid an investigation into alleged financial misconduct.
Earlier this month, AIG posted a $7.8 billion quarterly loss, its largest ever, after writing down assets linked to subprime mortgages.
AIG shares were down 12 cents at $38 in early New York Stock Exchange trading.
(Reporting by Neha Singh in Bangalore and Lilla Zuill in New York; Editing by Sue Thomas and Maureen Bavdek)
