Greenberg Says ‘Disgraceful’ Legal Case Destroyed Great FirmBy
Maurice “Hank” Greenberg, the former American International Group Inc. chief executive officer, lambasted the New York State attorney general’s office after admitting that he approved two reinsurance deals that regulators have called fraudulent.
“AIG is a shadow of what it was, people lost millions of dollars, billions of dollars. Pension funds, the same thing. For what?” Greenberg said Friday in a phone interview. “So I can pay $9 million?”
Greenberg, 91, built AIG into the world’s largest insurer until stepping down in 2005 amid a probe by then-Attorney General Eliot Spitzer into faulty risk-transfer contracts. The company agreed the next year to pay about $1.6 billion in a settlement with Spitzer and the U.S. Securities and Exchange Commission.
AIG stumbled after Greenberg’s departure, nearly collapsing in 2008 on losses tied to subprime mortgages. The company sold many of its prized units to repay a U.S. bailout that swelled to $182.3 billion.
Greenberg has spent years faulting regulators, his successors and others for the decline of AIG. Even after the announcement of the settlement Friday, he criticized Spitzer for the use of the Martin Act, a law that gives New York prosecutors broad powers to probe white-collar crime.
“To have a law like that in the hands of people not responsible is disgraceful,” Greenberg said. The case “destroyed a great company that was a national asset.”
AIG and Spitzer declined to comment. Greenberg’s lawyer, David Boies, said in a statement that Eric Schneiderman, New York’s current attorney general, “has no evidence -- none -- that Mr. Greenberg was aware at the time he approved the two transactions at issue that there was anything improper about them.”
— With assistance by Katherine Chiglinsky, and Chris Dolmetsch