Greenberg Rejected by U.S. Supreme Court in Bid to Scuttle TrialBy
The U.S. Supreme Court turned away an appeal by Maurice “Hank”Greenberg, refusing to derail a fraud lawsuit by New York state against the former American International Group Inc. chairman.
Three months after a trial in the case began in state court in Manhattan, the justices said they wouldn’t hear contentions by Greenberg and former AIG Chief Financial Officer Howard Smith that federal securities law bars the case from going forward.
Greenberg and Smith are fighting allegations that they used two sham transactions to hide the insurer’s true financial condition. The trial began in September, more than 11 years after former New York Attorney General Eliot Spitzer filed suit.
The New York Court of Appeals, the state’s highest court, let the trial go forward in June, rejecting arguments by the two former executives. New York Attorney General Eric Schneiderman urged the Supreme Court not to hear the appeal.
Greenberg, 91, stepped down as chief executive officer of AIG in 2005 after building it into the world’s largest insurer over four decades. Shortly thereafter, company officials said one of its transactions was improper, restated its earnings by $3.4 billion, and paid $1.6 billion to settle claims by regulators.
The case is Greenberg v. New York, 16-284.
— With assistance by Chris Dolmetsch