Ex-AIG chief faces SEC scrutiny

Ex-AIG chief faces SEC scrutiny

Former AIG (AIG) chief Maurice “Hank” Greenberg has some questions to answer. The Securities and Exchange Commission has sent Greenberg a so-called Wells Notice informing him he may face civil charges in a reinsurance deal earlier this decade with Berkshire Hathaway’s (BRKA) General Re, The Wall Street Journal reports. Four former General Re execs and one ex-AIG executive were convicted earlier this year on charges they carried out a fraudulent deal that allowed AIG to make its reserves look stronger than they really were, falsely bolstering investors’ confidence in the company. The 83-year-old Greenberg hasn’t been charged, but a judge said this week that jury could conclude the conspiracy started with a phone call made by Greenberg.

The development comes as Greenberg has been agitating for change at AIG, in the wake of two huge quarterly losses at the insurer. Greenberg recently sent AIG’s board a letter saying the company is in “crisis” and questioning its decision to raise as much as $20 billion in capital in the markets rather than sell noncore assets.

Unsurprisingly, Greenberg has indicated he will fight any charges. Robert Morvillo, his lawyer, said the Wells notice “is a step in the process,” the Journal reports. “We remain confident of our position on the merits, and we believe that none of the remaining issues are material to AIG’s financial statements. When the commission has had the opportunity to consider all the facts, we believe that they will agree.”

CNN