AIG ex-chief to pay millions in fraud probe
Two top former executives of troubled insurance giant American International Group agreed to pay fines to settle charges by US regulators that they misled investors by inflating the firm's results.business Updated: Aug 07, 2009 07:53 IST
Two top former executives of troubled insurance giant American International Group (AIG) agreed on Thursday to pay fines to settle charges by US regulators that they misled investors by inflating the firm's results.
Former long-time chief executive officer Maurice "Hank" Greenberg and former chief financial officer Howard Smith were involved in transactions that inflated results from 2000-05 and violated anti-fraud laws, the Securities and Exchange Commission said.
The executives were "responsible for material misstatements that enabled AIG to create the false impression that the company consistently met or exceeded key earnings and growth targets", the SEC said. The allegations follow a separate $800-million settlement with the insurer in 2006 for securities fraud and improper accounting.
Greenberg has agreed to pay a $15-million fine and Smith a $1.5-million fine to settle the charges, without admitting any wrongdoing.
Greenberg was at AIG's helm for 38 years before stepping down amid investigations into the firm's accounting practices.
AIG was brought to the brink of collapse last September and has since received government bailouts totalling more than $180 billion. The bailouts became a major headache for President Barack Obama after it emerged in March that the company paid out about $165 million in bonuses to its executives after receiving government funds.