Spitzer sues AIG's Greenberg for accounting tricks

New York Attorney General Eliot Spitzer said Thursday he would sue Maurice "Hank" Greenberg, former chief executive of American International Group Inc.(AIG), for allegedly using accounting tricks to distort the company's finances and mislead regulators.

Spitzer said that AIG used sham reinsurance contracts and other transactions to understate liabilities for claims and hided losses. Spitzer's complaint followed AIG's admission May 1 that improper accounting overstated its net worth by 2.7 billion dollars.

Spitzer and the New York Insurance Department, which was a party to the suit, said Greenberg was "personally involved" in negotiating fraudulent transactions and was "directly" responsible for the company's alleged misconduct. Greenberg was also accused of ordering AIG traders to purchase the company's shares in February to shore up its stock price. Share of AIG had fallen 26 percent since the company disclosed subpoenas on February 14.

Spitzer had simultaneously been presenting evidence to a state grand jury, which would determine whether the accounting tricks should be indicted on criminal basis.

Source: Xinhua