Executives Reach Settlement in Accounting Fraud Case -
Maurice Greenberg, the former chief executive of American International Group, reached an unexpected settlement ending a tumultuous,
decade-long battle over civil accounting fraud charges first brought in 2005 by New York Attorney General Eliot Spitzer.
Mr. Greenberg and his co-defendant Howard Smith, who is A. I.G.’s former chief financial officer, reached the
agreement with the current New York attorney general, Eric T. Schneiderman, who announced it on Friday.
The settlement marks an undramatic conclusion to a saga
that began during an era in which Mr. Spitzer extracted hefty fines after accusing Wall Street research analysts of publishing biased research, mutual fund managers of shady trading, and insurance brokers of bid-rigging and kickbacks.
The trial began in September before New York State Supreme Court Justice Charles E. Ramos after 11 years of delays
and legal maneuvering, much of it as Mr. Greenberg appealed rulings by the judge.
In the settlement, Mr. Greenberg acknowledged that he personally initiated, participated in
and approved the transactions at the heart of the case, and Mr. Smith admitted to playing a similar role.
investors — one that converted auto warranty insurance losses into investment losses, and another that pumped up A. I.G.’s reserves by $500 million.
After his testimony and cross-examination in the trial, Mr. Greenberg
and the attorneys arguing on behalf of the state began mediation talks in December.
