New York Attorney General Eliot Spitzer has dropped what lawyers for Maurice “Hank” Greenberg and Howard Smith, former executives of American International Group, say are the “most explosive and significant claims” in a civil case against them.
However, Spitzer’s office has said the major charges in the case remain in effect and will be pursued.
Greenberg’s lawyers said the charges were dropped pending a potential court order on Thursday to compel the production of documents central to Greenberg’s defense, according to a statement from David Boies, the lead lawyer represening Greenberg. The action follows a court order earlier this year requiring AIG to turn over to Greenberg the so-called “internal investigation” report upon which the Attorney General based his complaint and efforts by Greenberg’s lawyers to further expedite discovery to enable them to seek dismissal of the entire case.
Greenberg is AIG’s former chairman and chief executive officer and Smith, its retired chief financial officer.
Boies said he is confident all remaining claims in the civil suit will also be dropped.
“We appreciate that the Attorney General has kept an open mind, considered the facts we have presented, and has now decided to drop these key claims from the complaint,” he said in a statement. “We are confident that when all the facts are out, the remaining claims, which relate to accounting disputes involving much smaller amounts than the claims that are being dropped, will also be dismissed,” Boies said.
“To the extent that the remaining accounting disputes affected AIG’s financial statements at all, most of the effect is attributable to accounting decisions that were undisputedly reviewed with, and approved by, AIG’s current management,” Boies added.
Howard Opinsky, spokesman for Greenberg added, “As we have said, Mr. Greenberg’s actions as chairman and CEO of AIG were legal, based on sound business judgment and in the best interests of AIG shareholders. Shareholders are owed an explanation as to why $1.6 billion in company funds were spent to settle allegations that do not withstand scrutiny.”
Vincent Sama and Andrew Lawler, lead lawyers to former CFO Smith, expressed similar sentiments.
“We are pleased by this development and are confident that, after all the facts are considered, the remaining claims will be dismissed,” they said in the statement.
However David Brown, who heads Spitzer’s Investment Protection Bureau, told The Associated Press that the charges dropped were minor and involved investment income and workers compensation reporting.