Former chairman and CEO of insurance group American International Group (AIG), Maurice “Hank” Greenberg, has resigned from the company’s board.
Greenberg wrote a letter to the board saying, “I previously stated my intention not to stand for re-election to the board. My decision to resign now results from my inability to receive information regarding the company and its operations necessary to fulfill my fiduciary duties. I wish the employees of A.I.G. every future success.”
Greenberg, along with former AIG CFO Howard Smith is being sued by New York Attorney General Eliot Spitzer. Spitzer’s suit claims that Greenberg and Smith manipulated the company’s financial statements by recording fraudulent transactions, in an effort to mislead regulators and investors. When news of the suit came out, MSN Money reported:
Mr Greenberg and Mr Smith were personally involved in arranging two “sham” reinsurance transactions with General Re, a reinsurer controlled by Berkshire Hathway that inflated AIG’s reserves, the complaint alleges.
Another was that the defendants allegedly hid losses from AIG’s underwriting business by converting underwriting losses to capital losses.
In a third alleged offence, the pair falsely reported the income from the purchase of life insurance policies as underwriting income.
Greenberg’s resignation is not surprising to many, given the circumstances he is in. He recently implied that he would step down at the company’s annual meeting, anyway. He has just resigned a little earlier.
AIG filed its much-delayed annual report last month, which restated earnings from the past five yeas, and ultimately lowering its net worth by $2.26 billion due to false accounting. AIG shares went up 28 cents in early trading today reaching $55.23.
Chris is a staff writer for murdok. Visit murdok for the latest ebusiness news.
