A 12-year legal battle between state prosecutors and the former chief executive of insurance company American International Group Inc. has been settled, both parties announced Friday.
A lawsuit claimed ex-AIG chief executive Maurice “Hank” Greenberg and ex-chief financial officer Howard Smith had manipulated AIG’s accounting records in 2000 and 2001 to hide hundreds of millions of dollars in losses from investors.
The settlement requires Greenberg to pay $9 million he received as performance bonuses. The settlement also requires Smith to pay $900,000.
AIG is one of the world’s largest insurance companies. It nearly collapsed in 2008 at the height of the financial crisis and received about $180 billion in bailout aid.
Greenberg, 91, said that the process required him and Smith to accept whatever recommendations were made by mediator Kenneth Feinberg.
“Although I do not agree with all of what he has proposed, because I agreed to the process, I accept his recommendations so that this matter can finally be resolved after a ludicrous 12-year pursuit by the attorney general,” said Greenberg, who was the CEO until his retirement in 2005. “In accepting Mr. Feinberg’s recommendations, I want to reiterate and reaffirm that I did nothing wrong.”
The settlement does not ban Greenberg from working in the securities industry or as an executive for any public company, as the lawsuit sought.
Former Attorney General Eliot Spitzer made Greenberg one of his targets in his 2005 crackdown on Wall Street. The Democrat was later elected governor and resigned in 2008.