Former AIG Head Hank Greenberg Accused of Fraud, Swiftly Settles


Hank Greenberg, the former AIG CEO who built the insurance company into the giant it is today before being ousted amid allegations he had inflated the firm's earnings, was sued by the SEC today for accounting fraud. The complaint, which also names AIG's former CFO Howard Smith, alleged that from 2000 to 2005 the pair were involved in "numerous improper accounting transactions" "that presented a false financial picture" of the company, and that Greenberg in particular was "publicly boasting about the company’s strength and double-digit growth while concealing its weaknesses through accounting sleights of hand." Greenberg's response was to immediately settle for $15 million — but not because he is guilty, his lawyer told the Times, because he is innocent:

the settlement is recognition of his lack of responsibility, even as a control person, for the vast majority of accounting issues included in A.I.G.’s restatement and the S.E.C.’s charges against the company.”

Right, of course. And when you have $3 billion in the bank, $15 million is very small price to pay for the satisfaction of proving your innocence.

Ex-Chief of A.I.G. Settles S.E.C. Case for $15 Million [NYT]