Former AIG executive sues AIG – he was duped!
This is a story that you just can’t make up. The former AIG CEO Hank Greenberg is suing AIG for losses incurred when the stock tanked. He is seeking compensation for tax that he paid and for the difference in what he paid for the stock and it’s value.
American International Group Inc, whose $61.66 billion quarterly loss was the largest ever for a U.S. company, has been sued for securities fraud by former Chief Executive Maurice “Hank” Greenberg.
Greenberg, the insurer’s largest individual shareholder, accused AIG of overstating its financial health and masking losses on credit default swaps that hedged default risk for at least $527 billion of debt.
Mr. Greenberg is pretty old I am wondering if he is suffering from some sort of time distortion and does not realize that he was the CEO while all of the tomfoolery was going on. This is just unreal, of course if he wins he will be paid with bail out money.
Editor’s note (Steve): It is important to read the full CNN article, you’ll note that Greenberg was ousted as CEO in March 2005, and the stock that he is suing about was paid to him (deferred compensation) in January 2008.
Greenberg ran AIG for nearly four decades before being ousted in March 2005, when New York Attorney General Eliot Spitzer was investigating transactions involving the insurer.
AIG’s quarterly loss led to a loss of $99.29 billion for the year, largely stemming from writedowns related to credit default swaps, mortgage securities and other toxic debt.
But still, what did he know and when did he know it?
This insanity has been going on since before 2005, you can't tell me he didn't know what was happening.
Oh, I see. This is one of those "experts" that the companies have to compensate with huge bonuses and pay so they won't "go to some other company?" Sounds like he had a real handle on the situation.
If I'm not mistaken, Hank Greenberg was ousted by Eliot Spitzer by forcing his resignation or threatening to prosecute the whole company ala Price Waterhouse. The companies fortunes went further south after that and as the credit defaults issues blow-up in late '2008, disaster strikes.
The Feds threw money at AIG without doing their due diligence.What major investor buys a company or takes a significant position without a careful review of the balance sheet and financial documents.No one at the Fed noticed that AIG had employment contracts in place for a substantial number of execs that would trigger bonus payments in the millons of dollars? And now the Feds and all of the talking heads scream to the heavens that this is inexcusable and intolerable.
I'm not excusing AIG, but I'm asking how all of the smartest guys in government from Albany to Washington managed to take a bad situation and make it worse.You'll pardon me for asking,why exactly do we want to trust them with our economy and our futures?