Posted Jun 14, 2007 03:21 pm CDT
American International Group has taken over a shareholder lawsuit against two former top executives.
The insurer claims former chief executive Maurice Greenberg and former chief financial officer Howard Smith manipulated earnings and entered into sham reinsurance transactions, Reuters reports. The $1 billion suit says their actions exposed the company to civil liability for securities law violations and possible criminal penalties.
The law permits companies to take over shareholder suits filed on their behalf.
The state attorney general also has pending suit against Greenberg and has settled a separate suit against AIG, the Wall Street Journal (sub. req.) reports.
Greenberg’s attorney, David Boies, told the Journal the lawsuit recites “old, recycled allegations that have largely been abandoned.”