More Civil Claims ‘Possible’ Against AIG’s Former Boss, But No Criminal Charges Expected

November 28, 2005

Additional civil charges against former American International Group Inc. Chairman and CEO Maurice “Hank” Greenberg are possible, but no state criminal charges are expected, a spokesman for New York Attorney General Eliot Spitzer said Friday, Nov. 25.

“The office decided months ago to pursue the case as a civil matter,” said Spitzer spokesman Darren Dopp when asked if criminal charges were possible.

“An amendment to the civil complaint is possible, but no final decision has been made,” Dopp said.

On Friday, The Wall Street Journal reported that a person familiar with the matter said Spitzer is expected to add to his civil complaint against Greenberg as early as next week.

Criminal charges are still possible, however, from federal prosecutors in two separate investigations of Greenberg, the newspaper reported. Greenberg’s attorney already has argued against any charges to the federal prosecutors, the newspaper reported, citing two knowledgeable sources.

Spokesmen for Greenberg’s lawyer wouldn’t comment in the report. Greenberg’s attorney and AIG spokesmen were unavailable Friday to return calls requesting comment.

Spitzer’s spokesman says the decision months ago not to pursue criminal charges is not a retreat, but rather the result of choosing to pursue action as a civil case.

Spitzer, who is running for New York governor in 2006, suffered a setback in his attempts to reform the mutual-fund industry in June when a jury acquitted former Bank of America Corp. broker Theodore C. Sihpol III of 29 counts of improperly trading mutual-fund shares after hours and couldn’t come to a decision on four other charges.

Spitzer dropped another set of criminal charges on Monday in his mutual-fund trading investigation.

The suit against AIG and Greenberg alleged “deception and fraud” in the accounting as a way to boost the company’s financial results and stock price. Greenberg has repeatedly denied wrongdoing. Greenberg ran the company for 38 years.

In late May, AIG restated five years of results after Spitzer began investigating whether the company was using accounting tricks to boost its stock. Adjustments earlier this month had a positive impact on AIG’s balance sheet, raising retained earnings some $490 million (euro416 million) higher as of Sept. 30.

The accounting probes led to the ouster of Greenberg and a civil lawsuit by Spitzer in May.

Topics Claims Fraud Abuse Molestation AIG

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